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 ArticleBank of Finland Issues Updates on AnaCredit Reporting
The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.
The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).
The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.
The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.
The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).
The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.
The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.
The Basel Committee on Banking Supervision (BCBS) published further information related to its 2021 assessment of global systemically important banks (G-SIBs), with additional details to help understand the scoring methodology.
The Financial Accounting Standards Board (FASB) is consulting on an Accounting Standards Update and the associated taxonomy improvements for requirements on troubled debt restructurings and vintage disclosures under the credit losses standard (for financial instruments) topic 326.
US Agencies issued a statement that summarizes the work undertaken during the interagency policy sprints focused on crypto-assets and provides a roadmap of future work related to crypto-assets.