Corporate Governance Bank of China

Topics: Corporate governance, Management, Corporation Pages: 7 (1889 words) Published: June 20, 2013
Overview of Corporate Governance

Corporate Governance is more than just corporate management. In broader sense, it includes a fair, efficient and transparent administration to meet certain well defined objectives. It is a system of structuring, operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers and complying with the legal and regulatory requirements, apart from meeting environmental and local community needs.

When it is practiced under a well-laid out system, it leads to the building of a legal, commercial and institutional framework and demarcates the boundaries within these functions are performed.

Cadbury’s (2002) definition- “Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship to those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.

The investors should be concerned and aware of their companies’ corporate governance policies because it will a) Monitor the concerned company is on the right path in relation to the set objectives by articulating their investment objectives to the management. b) A strong good corporate governance policies being adhered can prove highly valuable and ultimately lead to a higher valuation of the company. c) Most importantly, the shareholders would understand their basic rights and overall functioning of the company by the management. d) To know whether the board and the management in practicing good corporate governance.

Reference for the Rules of Bank of China’s Corporate Governance- www.boc.cn/en/investor www.oecd.com
www.bis.org/publ/bcbs176.pdf
Books-
1) The Board of Directors 25 Keys to Corporate Governance- 马丽安  2) Corporate Governance Robert A.G. Monks & Nell Minow 

Top 10 corporate governance rules of bank of china

Bank of China Limited Articles of Association Grade 9/10

1. The guideline in this relating to Articles of Association is the most important essence of a company like a backbone because it is the contracts between company and member of the company and between the members inter se. It is important as they are the regulations that govern the relationship between shareholders and directors. The AOA is required for the establishment of a company under law and it governs the law of issuing shares, voting and dividend rights etc. The Bank of China has very cleared laid AOA whereby the parties involved or binding to be involved duly understand the guidelines and expected responsibilities in the event of involving in any business with the company.

Procedural Rules for Shareholders’ Meeting

Chapter 1 General Provisions Grade- 8/10

2. This rule is of utmost importance in my opinion since it is formulated with the Procedural Rules for Shareholders referred as “Procedural Rules” with the whole purpose of ensuring that the shareholders to understand their functions and powers and shareholders’ meeting to be operated smoothly and bind with the Company Law of the country. The Company i.e. Bank of China does abide by the law and follows the code that they have formulated to ensure and set an example as a pioneer in positive corporate governance, therefore average investor is protected under the procedural rules as Board of Directors role is to oversee the legality of the shareholders’ meeting and that all legal formalities and issues are valid.

Chapter 2 Functions and Powers of Shareholders’ Meeting Grade 7/10

3. This rule i.e. Article 6 is the body of authority of the Bank and as such will decide the business operation policies, review and approve material...
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