CBIRC Action Plan Aims to Improve Governance in Banking and Insurance
CBIRC published a three-year action plan (2020-2022) to improve corporate governance in the banking and insurance sectors. The key topics covered in the action plan include general requirements with respect to governance (including guiding ideology, basic principles, overall objectives, and assessment), shareholder code of conduct, board of directors and other governance entities’ performance of duties, and regulatory capacity building. The plan proposes certain targeted improvements and includes the implementation timeline for these improvements. CBIRC also published a set of questions and answers (Q&A) on the three-year action plan.
In addition, Zhou Liang, a Member of the Party Committee and the Vice Chairman of CBIRC, elaborated on the progress achieved with respect to the governance of "joint-stock banks," the existing issues in governance, and the ways to improve corporate governance of joint-stock banks. The following are the key highlights of the three-year action plan on governance in the banking and insurance sectors:
- Clarify and strictly implement requirements for the integration of party leadership into corporate governance in 2020. CBIRC will continue to explore ways and paths for the organic integration of party leadership and corporate governance in 2021 and 2022.
- Ensure that initial comprehensive assessment of corporate governance of bancassurance institutions has achieved the required results in 2020. Next, in 2021, the focus will be on the application of assessment results and rectification of difficult issues while, in 2022, the focus will be on improving the evaluation system and mechanism.
- Rectify the problem in equity and related-party transactions while striving to improve the behavioral restraint mechanism of major shareholders in 2020. The focus, in 2021, will be on improving the protection mechanism for the rights and interests of small and medium shareholders and promoting the rectification of the stock issue of shareholders. In 2022, CBIRC will focus on further exploring and improving the shareholder governance mechanism of bancassurance institutions.
- Regulate the performance of duties of directors, supervisors, and senior executives in 2020. Then, in 2021, focus will be on improving the operating mechanism of the board of directors, supervisors, and senior management. In 2022, CBIRC will further promote the establishment and strict implementation of high standards of professional ethics and continue to optimize the working mechanism of each governance body.
- Implement performance appraisal and salary management regulations at bancassurance institutions in 2020. CBIRC will focus on improving the remuneration mechanism and internal auditing mechanism in 2021, in addition to further exploring diversified incentive and restraint methods in 2022.
- Improve regulatory disclosures. In 2021, CBIRC will focus on improving the regulatory requirements for information disclosure in the banking and insurance sectors. Additionally, in 2022, the focus will be on strengthening the daily supervision of the quality of information disclosure.
- Promote establishment of a corporate governance regulatory system and information system in 2020. Then, CBIRC will focus on improving the working mechanism of corporate governance supervision and exploring and improving differentiated supervision in 2021. Finally, in 2022, focus will be on strengthening domestic and international exchanges and cooperation and improving regulatory capabilities and standards.
Related Links (in Chinese)
Keywords: Asia Pacific, China, Banking, Insurance, Action Plan, ESG, Remuneration, Disclosures, Governance, CBIRC
Previous Article
FSI Note Discusses Challenges Associated with COVID Relief MeasuresRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
