Below are key takeaways from ISS’ recently released 2023 Proxy Season Review – China. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- Enhanced disclosure requirements and continued decrease in corporate bond issuances : The number of corporate bonds issuance proposals raised by Chinese bond issuers continued to decrease in a trend seen since 2021, following the release of the revised version of Administrative Measures for the Issuance and Trading of Corporate Bonds by the China Securities Regulatory Commission (CSRC) where more stringent rules were applied, and new enhanced guidelines of the Shanghai Stock Exchange in 2023.
- Updated regulations on Global Depositary Receipts (GDRs): The CSRC urged companies to raise funds more prudently by implementing stricter regulations for the issuance of GDRs and requests companies to adhere to its newly published guidance on the registration, filing, utilisation and other requirements for overseas offerings.
- Continued increase in ESG disclosure by public companies: 1,758 listed companies disclosed ESG-related reports, a significant increase from 1,468 companies the year before. Of the 1,758 listed companies that released their 2022 ESG-related reports, more than half have established ESG committees at the management level, while more than 100 have done so at the board level.
- Independent directors and board special committes: The CSRC promulgated new Measures for the Management of Independent Directors of Listed Companies. Under the new Measures, it defined the roles, qualifications and responsibilities of independent directors in details. In addition, duties and independence level of the board special committees are specified, including the requirements of majority independence for board special committess.
- China’s call to boost foreign investments: In August 2023, the State Council issued Opinions on Further Optimizing the Foreign Investment Environment and Increasing Efforts to Attract Foreign Investment indicating a further market opening is underway. Under the Opinions, foreign investments are expected to facilitate the expansion of the country’s technology research and development sectors, as well as projects in the biomedical sector.
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By: Ada Lu, Elodie Zeng, Frances Wang, Rui Ning Cheng, Xiao Xie, Xinyi Yang, Yao Yuan
