slide1 n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Policy Dialogue on Corporate Governance in China PowerPoint Presentation
Download Presentation
Policy Dialogue on Corporate Governance in China

Loading in 2 Seconds...

play fullscreen
1 / 9

Policy Dialogue on Corporate Governance in China - PowerPoint PPT Presentation


  • 81 Views
  • Uploaded on

Policy Dialogue on Corporate Governance in China. The Independence of the Board – Why and Where Independence Matters?. Clarence Kwan February 25-26, 2004. Where & Why Independence Matters?. Independence  Balance of Power  Potential Structural Conflicts

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Policy Dialogue on Corporate Governance in China' - verdi


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

Policy Dialogue on Corporate Governance in China

The Independence of the Board – Why and Where Independence Matters?

Clarence Kwan

February 25-26, 2004

where why independence matters
Where & Why Independence Matters?
  • Independence  Balance of Power 
  • Potential Structural Conflicts
  • Independent in Fact ≠ Independence in Action
  • Independent Directors ≠ Independent Board
  • Independent Board ≠ Effective Board
independence balance of power
Independence  Balance of Power 

The Corporate Governance Triangle

BOARD OF DIRECTORS

MEDIATION

& CONFLICT

RESOLUTION *

COMMUNICATION

OVERSIGHT

POLICY & LONG TERM PLANNING

ELECTION

REPRESENTATION

BUSINESS STRATEGY & PERFORMANCE

INVESTMENT

DIVIDENDS & GROWTH

MANAGEMENT

SHAREHOLDERS

DISCLOSURE

INVESTOR RELATIONS

©2004 Deloitte & Touche Tohmatsu

3

potential structural conflicts
Potential Structural Conflicts

Independent check and balance is necessary.

independent in fact independence in action
Independent in Fact ≠Independence in Action

Peers Review

Organized by an association of

Independent Directors

Voluntary  Comply or Explain  Mandatory

slide6

法(feng) Legality

情 Relationship

理Reasonableness

理(li) Reasonableness

情(qing) Relationship

法 Legality

Independent Directors ≠ Independent BoardCulturalDifference in Decision Making Priorities

independent directors independent board cultural difference in group behaviors
Independent Directors ≠ Independent BoardCulturalDifference in Group behaviors

會而不議

hui er bu yi

Meet but not discuss

(Face saving)

議而不決

yi er bu jue

Discuss but not decide

(Guanxi not clear)

決而不行

jue er bu xing

Decide but not act

(Passive resistance)

會議= Meeting = Meet (hui) & discuss (yi)

independent board effective board balancing compliance with performance
Independent Board ≠ Effective BoardBalancing Compliance with Performance
  • “Bad corporate governance, i.e. a lack of board independence, can ruin a company, but cannot, on its own, ensure its success.”
  • An effective board must also focus on corporate performance in terms of strategy and value creation. It must address four key strategic issues to insure success:
    • Choice and clarity of strategy
    • Strategy execution
    • Ability to respond to abrupt changes
    • Ability to undertake successful M&A

Source: Enterprise Governance – International Federation of Accountants 2003

closing
Closing
  • Board independence is essential for maintaining the balance between the interests of management and shareholders
  • We must create an enabling environment for independent directors to truly act independently
  • We must balance corporate governance with value creation.

©2004 Deloitte & Touche Tohmatsu

9