These eight types of people cannot serve as independent directors of listed companies, and the method of independent directors has come to supervise. Third | Director | Listed Company
The China Securities Regulatory Commission recently issued the "Measures for the Administration of Independent Directors of Listed Companies", which will come into effect on September 4, 2023, and set a one-year transitional period.
Previously, the "Independent Director Measures" were publicly solicited for public opinion from April 14 to May 14, 2023. The revised and improved Measures for Independent Directors consist of six chapters and forty-eight articles, which specify that the proportion of independent directors to the members of the board of directors shall not be less than one-third; Listed companies should establish an audit committee in their board of directors, with more than half of the independent directors. Refine the criteria for determining independence, and under eight circumstances, individuals are not allowed to serve as independent directors. For example, individuals who work in a listed company or its affiliated enterprises, as well as their spouses, parents, children, and major social relationships, are not allowed to serve as independent directors of the listed company. In principle, independent directors are required to serve as part-time independent directors in a maximum of three domestic listed companies. Independent directors supervise potential significant conflicts of interest through platforms such as independent director meetings and board committees. Independent directors are required to work on-site at the listed company for no less than fifteen days per year, and work records should be made. Establish a sound performance guarantee mechanism, and listed companies should provide necessary working conditions and personnel support for independent directors to fulfill their duties. Establish a sound relief mechanism for the restricted performance of independent directors. If independent directors encounter obstacles in their performance, they can explain the situation to the board of directors and request the cooperation of directors, senior management, etc. If the obstacles cannot be eliminated, they can report to the China Securities Regulatory Commission and the stock exchange. According to the principle of matching responsibilities and rights, the factors to be considered for determining the responsibilities of independent directors and the circumstances of not being punished should be targeted and refined, reflecting that excessive punishment is equivalent and accurate accountability is pursued.
At the same time, the Shanghai Stock Exchange has revised and released seven self regulatory rules, including the Stock Listing Rules and Standardized Operation Guidelines for the Main Board and the Science and Technology Innovation Board, to connect with the relevant requirements of the Independent Director Measures, ensure the smooth implementation of various reform measures, and promote the formation of a more scientific and reasonable independent director system.
This reform puts forward higher requirements for the performance of the exchange. To this end, the Shanghai Stock Exchange will strengthen daily supervision from four aspects. Firstly, strict supervision of the performance of independent directors. Pay close attention to the performance of independent directors and ensure that they comply with behavioral norms such as the number of part-time employees, working hours, work records, and regular reporting. Secondly, we will continue to ensure the supervision of the performance of listed companies. Urge listed companies to provide necessary conditions for independent directors to perform their duties, and avoid the lack of cooperation or obstruction of independent directors by listed companies and related entities. Thirdly, establish a sound, scientific and rigorous system for disciplinary action against independent directors. Reasonably distinguish responsibilities based on the performance of independent directors, and ensure that penalties are equivalent and accountability is accurately pursued. Fourthly, fully leverage the functions of the "three points and one line" mechanism. Strengthen collaboration with the dispatched agencies of the China Securities Regulatory Commission to ensure that independent directors fulfill their duties and responsibilities.
