Corporate Governance System-World Credit Organization

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3.14 Corporate governance system

The governance system is the most fundamental system and it is very important. In the ICE8000 system, there are three special standards related to corporate governance, namely: "ICE8000 Governance Standards for State Organs and Units", "ICE8000 Governance Standards for Social Organizations and Units", and "ICE8000 Governance Standards for Enterprise Units".

1. The concept of corporate governance

Corporate governance, also known as corporate governance or corporate governance or organizational governance, can be understood in the following three ways:

1. Corporate governance refers to the company's shareholders' meeting, board of directors, board of supervisors, and managers exercising the rights of a legal person and assuming responsibilities and obligations in accordance with the articles of association or contract.

2. In the narrow sense, corporate governance mainly refers to the relationship between shareholders, directors, supervisors and managers within the company.

3. In a broad sense, corporate governance also includes the relationship with stakeholders (such as employees, customers, the public, etc.).

2. The concept of corporate governance structure and corporate governance system

The legal person governance structure is the organizational structure of the legal person, that is, the relationship between the company's shareholders meeting, board of directors, board of supervisors and managers. The corporate governance structure is generally determined by law (such as the company law), the company's articles of association, or related contracts. The corporate governance structure also belongs to the system, and it is the most fundamental system of a company.

The legal person governance system is the system for operating and perfecting the corporate governance structure. In order to ensure that enterprises that implement integrity management establish a sound corporate governance structure, the ICE8000 system requires them to establish a corporate governance system.

Third, the components of corporate governance structure

According to the provisions of the company law of our country, the corporate governance structure of the company consists of four parts:

1. The shareholders' meeting or general meeting of shareholders is composed of shareholders of the company, which reflects the owner's ultimate ownership of the company;

2. The board of directors, elected by the company's general meeting of shareholders, makes decisions on the company's development goals and major business activities, and safeguards the rights and interests of investors;

3. The board of supervisors is the company's supervisory body, which plays a supervisory role in the company's finances and the behavior of directors and operators;

4. Manager, appointed by the board of directors, is the operator and executor.

Fourth, the establishment of corporate governance structure should follow the principles

The principles that should be followed in establishing the corporate governance structure are:

1. The principle of clear responsibilities

The various components of the corporate governance structure of the company should have a clear division of labor. On this basis, each should perform its duties and assume its own responsibilities, so as to avoid confusion caused by unclear responsibilities and division of labor, which will affect the normal performance of duties of each part. the entire function.

2. The principle of coordinated operation

The various components of the company's corporate governance structure are closely integrated and run together. Only by coordinating and cooperating with each other can they operate efficiently and effectively manage the company.

3. The principle of effective checks and balances

The various parts of the company's corporate governance structure must not only coordinate and cooperate, but also effectively achieve checks and balances, including checks and balances between different levels of institutions and checks and balances between different stakeholders.

V. The role of corporate governance structure

Corporate governance structure can solve three basic problems related to the success or failure of enterprises.

1. How to ensure the return on investment of investors (shareholders), that is, to coordinate the interests of shareholders and enterprises.

In the case of separation of ownership and management rights, due to the dispersion of equity, shareholders may lose control, and the enterprise is controlled by insiders (ie managers). At this time, the insiders who control the enterprise may make decisions that violate the interests of shareholders and violate the interests of shareholders. This situation will cause investors to be reluctant to invest or shareholders to "vote with their feet", which will damage the long-term development of the enterprise. The corporate governance structure is precisely to ensure the control and interests of the owners (shareholders) from the system, so that investors are willing to support and help the development of enterprises.

2. How to coordinate the relationship between various interest groups within the enterprise.

Generally speaking, enterprises have the following interest groups: shareholders, directors, supervisors, chairman, managers, deputy managers, middle-level personnel, and ordinary employees. Different interest groups have different interest demands. How to turn these interest demands into a positive impetus rather than a reverse impetus for the development of the enterprise is not enough to rely solely on the personal qualities or personal charm of some people or leaders. It needs to be perfected. The governance structure allows various interest groups to claim and obtain legitimate rights and interests according to game standards.

3. How to resolve or deal with bad external pressure.

Enterprises (especially those in countries with an unsound legal environment) sometimes face adverse external pressures. If they are not handled properly, it will bring adverse effects to the enterprise. For example: Under the pressure of government leaders, a company merged with another local company, resulting in long-term losses after the merger. Under the pressure of government leaders, a certain company sponsored a huge amount of money for a local image project. In some enterprises with a relatively sound corporate governance structure, the board of directors takes back the decision-making power on such issues. When the general manager faces pressure from government leaders, he resolves the relevant pressure on the grounds that he has no right to make decisions or the board of directors has not voted through.

6. The risk of lack of legal person governance structure

The relevant content of the corporate governance structure of our country's company law is very good. It has almost transplanted all the modern corporate governance structures from the West. corresponding risk. However, most businesses do not operate under company law. Although it is understood from the articles of association that the enterprise has a legal person governance structure, the system on paper does not actually operate. For the time being, we call this type of enterprise: an enterprise lacking a corporate governance structure, or an enterprise lacking a corporate governance structure.

The risk of lack of corporate governance structure is that the interests of corporate shareholders, directors, supervisors, chairman, managers, deputy managers, middle-level personnel, and ordinary employees cannot coordinate the interests of various interest groups, which often cause civil strife.

Why do some companies lack corporate governance structures but still be successful? The reason is: the core leaders of the enterprise have good interpersonal relationships (such as kinship and friendship) with the spokespersons of interest groups such as directors, supervisors, and senior personnel of the enterprise. This kind of good interpersonal relationship and the resulting balanced state have well coordinated the interests of various interest groups.

However, in the long run, interpersonal relationships cannot replace the corporate governance structure, and the balance of interpersonal relationships will change due to factors such as the death of core leaders or related personnel, the sudden emergence of newcomers, and changes in the interests of individual members of the team , eventually leading to civil unrest.

The following phenomena can generally be regarded as the appearance of the lack of corporate governance structure:

1. The chairman exceeds his authority to interfere with the general manager's affairs, and the general manager exceeds his authority to decide the board of directors affairs;

2. The chairman and the general manager are the same person;

3. Offside or absence of duties of directors, supervisors, and general manager;

4. The meeting of the board of directors and the general manager will be held together;

5. The board of directors, board of supervisors or shareholder meeting has not been held for a long time;

6. Directors or supervisors or the general manager or chairman do not know the limits of their powers and responsibilities;

7. There is no resolution document of the board of directors or the board of supervisors;

8. Abnormal resignation of directors, supervisors and senior executives;

9. Shareholders complain to the media or relevant departments.

7. Requirements and precautions for establishing a corporate governance system

The establishment of the legal person governance system is to operate and improve the company's legal person governance structure.

The legal person governance system should meet the following requirements:

1. The directors, supervisors, managers and deputy managers of the company should regularly study the company law and the articles of association, accurately understand the content of the company law and the articles of association related to corporate governance, and accurately know the limits of their powers and responsibilities.

Company law is the transplantation of the corporate governance structure of western modern enterprises to China. The essential characteristics of the corporate governance structure of modern Western enterprises are: it is the embodiment and organic unity of the principles of democracy, efficiency, and decentralization and checks and balances in the corporate governance structure. For example, one person one vote in the board of directors and one share one vote in the shareholders meeting belong to democracy; the general manager centrally exercises the power of the administrative department for the sake of efficiency. Power embodies the principle of separation of powers and checks and balances.

2. The company's articles of association are the highest document of the company. The company should hold shareholders' meetings, board of directors, and board of supervisors in accordance with the regulations of the articles of association.

3. Shareholders' meeting, board of directors, board of supervisors, and managers shall not exceed each other's authority. Decisions made by exceeding authority are not only invalid, but the party exceeding authority shall bear corresponding legal and credit responsibilities.

4. The manager's office meeting should be held separately from the board meeting.

5. Shareholder meetings, board of directors, and board of supervisors meetings should have meeting minutes or meeting minutes, and participants should sign their opinions on the minutes.

6. The resolutions of the shareholders meeting, the board of directors and the board of supervisors shall be signed by the participants.

7. The distribution of powers and responsibilities between the shareholders' meeting, the board of directors, the board of supervisors, and managers must not violate the mandatory provisions of the law and the provisions of the articles of association, and should be continuously improved according to the actual situation.

8. The corporate governance structure chart should be drawn according to the articles of association and related systems and contracts, and compared with the company law. If there is any part that violates the mandatory provisions of the company law, a board of directors should be convened to make adjustments.

VIII. Reference style of corporate governance system

**Corporate Governance System

Chapter 1 General

Article 1 This system is formulated in order to operate and improve the corporate governance structure of the company.

Article 2 The company should strive to improve the corporate governance structure.

Chapter II Requirements for Corporate Governance

Article 3 Requirements for corporate governance:

1. The directors, supervisors, managers and deputy managers of the company should regularly study the company law and the articles of association, accurately understand the content of the company law and the articles of association related to corporate governance, and accurately know the limits of their powers and responsibilities.

2. The company's articles of association are the highest document of the company. The company should hold shareholders' meetings, board of directors, and board of supervisors in accordance with the regulations of the articles of association.

3. Shareholders' meeting, board of directors, board of supervisors and managers shall not exceed each other's authority. A decision made beyond its authority is invalid, and the party exceeding its authority shall also bear corresponding legal and credit responsibilities. If the relevant employees of the company know or should know that they have exceeded their authority, if they still implement the decision, they should be punished according to the situation.

4. The manager's office meeting should be held separately from the board meeting.

5. Minutes should be kept for shareholders meeting, board of directors and board of supervisors meetings, and participants should sign their opinions on the records.

6. The resolutions of the shareholders meeting, the board of directors and the board of supervisors shall be signed by the participants.

7. The distribution of powers and responsibilities between the shareholders' meeting, the board of directors, the board of supervisors, and managers must not violate the mandatory provisions of the law and the provisions of the articles of association, and should be continuously improved according to the actual situation.

Article 4 Shareholders, directors, supervisors, and managers of the company should study the "Company Law" and the company's articles of association, and must not assume corresponding responsibilities on the grounds that they do not know the law or the articles of association.

Article 5 The credit management department shall draw a corporate governance structure chart according to the articles of association, and compare it with the company law. If there is any part that violates the mandatory provisions of the company law, it shall submit it to the board of directors for adjustment.

Chapter Three Evaluation and Improvement of the System

Article 6 Regular evaluation and improvement of the system. Every year before the annual meeting of the World Credit Organization [WCO], this system is evaluated. The content of the evaluation is: the function and significance of this system, and the problems and deficiencies of this system. Then according to the evaluation result, improve this system.

Article 7 Irregular evaluation and improvement of the system. Every employee and every department in the World Credit Organization [WCO] has the right to put forward suggestions for improving this system. The suggestions should detail the reasons, necessity and possibility of improvement. The suggestions are generally in written form or in oral form. , in oral form, the Credit Management Department shall make a written proposal based on the oral content. After the credit management department receives the system revision proposal, it will report to the president immediately, and the president will decide whether to revise or hold a special meeting to discuss the revision proposal.

Article 8 After the system evaluation, if it needs to be improved, fill in the "Application Form for Document Change", and implement the document change after approval by the original approver or his successor.

Chapter 4 Responsibility and reward and punishment measures

Article 9 Staff who fail to comply with the provisions of this system will be given warnings and criticisms. If the nature and circumstances or consequences are serious, they will be punished with demotion.

Article 10 Those who put forward good suggestions for the improvement of this system shall be commended in a circular.

Chapter Five Records

Article 11 The records used in this system include: "Illustration of Corporate Governance Structure", see the attachment.

Chapter VI Supplementary Provisions

Article 12 This system comes into effect on the date of promulgation.

Article 13 This system is interpreted by the Credit Management Department of the World Credit Organization [WCO].

9. Corporate Governance Structure Chart of a Limited Liability Company with a Board of Directors and a Board of Supervisors (made according to the Company Law of my country)

Corporate Governance Structure Chart

X. Excerpts from articles on corporate governance in my country's company law

1. Shareholders' meeting authority and standard of procedure

Article 37 The shareholders' meeting of a limited liability company shall consist of all shareholders. The shareholders' meeting is the company's organ of power, which shall exercise its functions and powers in accordance with this Law.

Article 38 The shareholders meeting shall exercise the following functions and powers:

(1) Decide on the company's business policy and investment plan;

(2) Election and replacement of directors and supervisors who are not staff representatives, and decision on remuneration of directors and supervisors;

(3) Review and approve the report of the board of directors;

(4) Review and approve the report of the board of supervisors or supervisors;

(5) Review and approve the company's annual financial budget plan and final account plan;

(6) Review and approve the company's profit distribution plan and loss recovery plan;

(7) Make a resolution on the increase or decrease of the company's registered capital;

(8) Make a resolution on the issuance of corporate bonds;

(9) Make resolutions on company merger, division, dissolution, liquidation or change of company form;

(10) Amending the articles of association of the company;

(11) Other functions and powers stipulated in the articles of association of the company.

Where the shareholders agree in writing unanimously on the matters listed in the preceding paragraph, a decision may be made directly without holding a shareholders meeting, and all shareholders shall sign and seal the decision document.

Article 39 The first shareholders meeting shall be convened and presided over by the shareholder with the largest capital contribution, and the functions and powers shall be exercised in accordance with the provisions of this Law.

Article 40 The shareholders meeting is divided into regular meeting and extraordinary meeting.

Regular meetings shall be held on time in accordance with the provisions of the company's articles of association. Shareholders representing more than one-tenth of the voting rights, more than one-third of the directors, the board of supervisors or supervisors of companies without a board of supervisors propose to hold an interim meeting, and an interim meeting shall be held.

Article 41 Where a limited liability company has a board of directors, the shareholders meeting shall be convened by the board of directors and presided over by the chairman; In the case of a position, more than half of the directors jointly elect a director to preside over it.

If a limited liability company does not have a board of directors, the shareholders meeting shall be convened and presided over by the executive director.

If the board of directors or executive directors are unable to perform or fail to perform the duties of convening a shareholders meeting, the board of supervisors or a supervisor of a company without a board of supervisors shall convene and preside over it; May self-convene and moderate.

Article 42 To convene a general meeting of shareholders, all shareholders shall be notified 15 days before the meeting is held; however, unless otherwise stipulated in the company's articles of association or otherwise agreed by all shareholders.

The shareholders' meeting shall make minutes of the decisions on the matters discussed, and shareholders present at the meeting shall sign the minutes.

Article 43 At the meeting of the shareholders meeting, the shareholders shall exercise their voting rights in proportion to their capital contributions; however, unless otherwise stipulated in the articles of association of the company.

Article 44 The discussion methods and voting procedures of the shareholders' meeting shall be stipulated by the company's articles of association, except as provided for in this law.

Resolutions made by the shareholders' meeting to amend the company's articles of association, increase or decrease the registered capital, and the company's merger, division, dissolution or change of company form must be passed by shareholders representing more than two-thirds of the voting rights.

2. Board of Directors Authority and Standards of Procedure

Article 45 A limited liability company shall have a board of directors with three to thirteen members; however, unless otherwise stipulated in Article 51 of this Law.

For a limited liability company invested and established by two or more state-owned enterprises or two or more other state-owned investment entities, the board of directors shall have employee representatives of the company; members of the board of directors of other limited liability companies may have company employee representatives. The employee representatives on the board of directors are democratically elected by the employees of the company through the employee representative meeting, employee assembly or other forms.

The board of directors shall have a chairman and may have a vice chairman. The method for selecting the chairman and vice-chairman shall be stipulated in the articles of association of the company.

Article 46 The term of office of directors shall be stipulated in the articles of association of the company, but each term shall not exceed three years. Directors may be re-elected upon expiration of their term of office.

If a director fails to re-elect in time upon the expiration of his term of office, or if a director resigns during his term of office and the number of members of the board of directors falls below the quorum, the original directors shall still perform their duties in accordance with laws, administrative regulations and the company's articles of association before the re-elected director takes office. directorship.

Article 47 The board of directors is responsible to the shareholders' meeting and exercises the following functions and powers:

(1) Convene the shareholders' meeting and report to the shareholders' meeting;

(2) Implement the resolution of the shareholders meeting;

(3) Determine the company's business plan and investment plan;

(4) Formulate the company's annual financial budget plan and final account plan;

(5) Formulate the company's profit distribution plan and loss recovery plan;

(6) Formulate plans for the company to increase or decrease its registered capital and issue corporate bonds;

(7) Formulate plans for company merger, division, dissolution or change of company form;

(8) Deciding on the establishment of the company's internal management organization;

(9) Deciding on the appointment or dismissal of the company's manager and its remuneration, and deciding on the appointment or dismissal of the company's deputy manager and financial officer and their remuneration according to the manager's nomination;

(10) Formulate the company's basic management system;

(11) Other functions and powers stipulated in the articles of association of the company.

Article 48 The meeting of the board of directors shall be convened and presided over by the chairman; if the chairman is unable to perform his duties or fails to perform his duties, the vice chairman shall convene and preside over them; Co-elect a director to convene and preside over.

Article 49 The discussion methods and voting procedures of the board of directors shall be stipulated in the articles of association of the company, except as provided for in this law.

The board of directors shall make minutes of the decisions on the matters discussed, and the directors present at the meeting shall sign the minutes.

Voting on resolutions of the board of directors shall be carried out by one person, one vote.

3. Manager's Responsibilities and Discussion Standards

Article 50 A limited liability company may have a manager, who shall be appointed or dismissed by the board of directors. The manager is accountable to the board of directors and exercises the following functions:

(1) Preside over the production and operation management of the company, and organize the implementation of the resolutions of the board of directors;

(2) Organize and implement the company's annual business plan and investment plan;

(3) Drafting the plan for setting up the company's internal management organization;

(4) Formulate the company's basic management system;

(5) Formulate the company's specific regulations;

(6) Propose the appointment or dismissal of the company's deputy manager and financial director;

(7) Decide on the appointment or dismissal of responsible management personnel other than those who should be appointed or dismissed by the board of directors;

(8) Other powers granted by the board of directors.

Where there are other provisions on the powers of the manager in the company's articles of association, such provisions shall prevail.

Managers attend board meetings.

Article 51 A limited liability company with a small number of shareholders or a relatively small scale may have one executive director and no board of directors. The executive director may concurrently serve as the company manager.

The functions and powers of the executive director are stipulated in the articles of association of the company.

Fourth, the board of supervisors and its standard of procedure

Article 52 A limited liability company shall have a board of supervisors whose members shall not be less than three. A limited liability company with a small number of shareholders or a relatively small scale may have one or two supervisors and no board of supervisors.

The board of supervisors shall include shareholder representatives and an appropriate proportion of company employee representatives, among which the proportion of employee representatives shall not be less than one-third, and the specific proportion shall be stipulated in the company's articles of association. The employee representatives on the board of supervisors are democratically elected by the employees of the company through the employee representative meeting, employee assembly or other forms.

The board of supervisors has a chairman who is elected by more than half of all supervisors. The chairman of the board of supervisors shall convene and preside over meetings of the board of supervisors; if the chairman of the board of supervisors is unable or fails to perform his duties, a supervisor jointly elected by more than half of the supervisors shall convene and preside over meetings of the board of supervisors.

Directors and senior managers shall not concurrently serve as supervisors.

Article 53 The term of office of supervisors shall be three years. Supervisors may be re-elected upon expiration of their term of office.

If a supervisor fails to be re-elected in time upon the expiration of his term of office, or if a supervisor resigns during his term of office and the number of members of the board of supervisors falls below the quorum, the original supervisor shall still perform the duties in accordance with laws, administrative regulations and the company's articles of association before the re-elected supervisor takes office. Supervisor duties.

Article 54 The board of supervisors and supervisors of companies without a board of supervisors shall exercise the following functions and powers:

(1) Check the company's finances;

(2) Supervise the behavior of directors and senior managers in performing company duties, and propose removal of directors and senior managers who violate laws, administrative regulations, company articles of association or resolutions of the shareholders' meeting;

(3) Require directors and senior managers to make corrections when their actions harm the interests of the company;

(4) Proposing to convene an interim meeting of the shareholders' meeting, and convening and presiding over the meeting of the shareholders' meeting when the board of directors fails to perform the duties of convening and presiding over the meeting of the shareholders' meeting stipulated in this law;

(5) Proposals to shareholders meeting;

(6) According to the provisions of Article 152 of this law, bring a lawsuit against directors and senior managers;

(7) Other functions and powers stipulated in the articles of association of the company.

Article 55 Supervisors may attend board meetings as non-voting delegates and raise inquiries or suggestions on resolutions of the board of directors.

The board of supervisors and the supervisors of companies without a board of supervisors may conduct investigations if they find that the company’s business conditions are abnormal.

Article 56 The board of supervisors shall hold at least one meeting every year, and supervisors may propose to hold an interim meeting of the board of supervisors.

The discussion methods and voting procedures of the board of supervisors shall be stipulated in the articles of association of the company, except as provided for in this law.

The resolution of the board of supervisors shall be passed by more than half of the supervisors.

The board of supervisors shall make minutes of the decisions on the matters discussed, and the supervisors present at the meeting shall sign the minutes.

Article 57 The expenses necessary for the board of supervisors and supervisors of companies without a board of supervisors to exercise their functions and powers shall be borne by the company.

The above content is excerpted from "Building an Integrity Unit - ICE8000 Integrity Management" (written by Fang Bangjian, free to use, but please indicate the source)