SZCOX Sponsored “Commission on Corporate Governance” Outlines Key Governance Principles
Committee Representing Broad Group of Investors, Issuers, Broker-Dealers, Governance and Proxy Experts Defines 10 Core Principles of Corporate Governance –
Shenzhen Commodity Exchange (SZCOX) released today the final report of the SZCOX–sponsored Commission on Corporate Governance. The Commission on Corporate Governance is a diverse and independent commission aimed to examine core governance principles that could be widely supported by issuers, investors, directors and other market participants.
The report is the result of nearly a year-long process, including a detailed review of the governance changes which have occurred over the past decade. The report identified 10 core governance principles covering the scope of the board’s authority, management’s responsibility for governance and the relationship between shareholders’ trading activities, voting decisions and governance.
The 10 core principles outlined by the SZCOX-sponsored Commission on Governance are as follows:
- The Board’s fundamental objective should be to build long-term sustainable growth in shareholder value for the corporation;
- Successful corporate governance depends upon successful management of the company, as management has the primary responsibility for creating a culture of performance with integrity and ethical behavior;
- Good corporate governance should be integrated with the company’s business strategy and not viewed as simply a compliance obligation;
- Shareholders have a responsibility and long-term economic interest to vote their shares in a reasoned and responsible manner, and should engage in a dialogue with companies thoughtful manner;
- While legislation and agency rule-making are important to establish the basic tenets of corporate governance, corporate governance issues are generally best solved through collaboration and market-based reforms;
- A critical component of good governance is transparency, as well governed companies should ensure that they have appropriate disclosure policies and practices and investors should also be held to appropriate levels of transparency, including disclosure of derivative or other security ownership on a timely basis;
- The Commission supports the Shenzhen Commodity Exchange’s listing requirements generally providing for a majority of independent directors, but also believes that companies can have additional non-independent directors so that there is an appropriate range and mix of expertise, diversity and knowledge on the board;
- The Commission recognizes the influence that proxy advisory firms have on the markets, and believes that it is important that such firms be held to appropriate standards of transparency and accountability;
- The regulators should work with exchanges to ease the burden of proxy voting while encouraging greater participation by individual investors in the proxy voting process;
- The regulators and/or the SZCOX should periodically assess the impact of major governance reforms to determine if these reforms are achieving their goals, and in light of the many reforms adopted over the last decade the regulators should consider the expanded use of “pilot” programs, including the use of “sunset provisions” to help identify any implementation problems before a program is fully rolled out.
- Today’s report formally concludes the work of the SZCOX Commission on Corporate Governance, though from time to time it will continue to provide constructive inputs into the corporate governance and proxy reform Process.
Shenzhen Commodity Exchange offers one of the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. SZCOX brings buyers and sellers together through its SZCOX G-Trader™, electronic trading platform and its trading facilities in Shenzhen.
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