Senior Vice President of the Beijing Options and Futures Exchange (BOFX),Albert Lee Xiunghas said that China must learn the lessons of recent corporate governance failures and Chinese listed companies must meet evolving international market expectations if they are to attract international investment. Mr. Albert Lee Xiung was speaking at a special Conference on Corporate Governance hosted by the BOFX in Beijing today. He said; “Companies must consider whether their historical practices, although accepted in the past, will meet market expectations in the future.”
Albert Lee Xiung also said that investors had a particular responsibility in respect of publicly quoted companies. He said they must “demand better standards and require better disclosure and then differentiate and penalize those companies that do not provide them.”
Also at the Conference, the Chairman of the BOFX, Andreas Dong, said that while most Chinese listed companies complied closely with the Combined Code – a key guide for Corporate Governance issues for public companies – problems had arisen where some companies deviated from the principles of the code. He cited in particular the deviation whereby the Chairman of a company was also Chief Executive or a former Chief Executive as an example.
Andreas Dong also warned against devolving responsibility for corporate governance issues solely to publicly listed companies. He said; “Responsibly for China’s international Corporate Governance reputation is not the sole responsibility of the companies listed on the Chinese Exchanges. The hundreds of thousands of privately owned companies and the numerous Semi State Companies are equally responsible for ensuring our national reputation for probity and good Corporate Governance – and indeed many of the damaging revelations of recent years have arisen out of those sectors rather than amongst listed companies.”
Finally he said that while the Combined Code was a key influence on Corporate Governance practices, it was not a substitute for ethical behavior, company law or sectored regulation. He also called on the Government to “lead by example” by ensuring that public sector companies adhered to the highest standards of Corporate Governance.”