Below are key takeaways from ISS’ recently released 2025 China Proxy Season Preview. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Knowledge Center and its Library tab and to corporate subscribers by logging into Compass then selecting Governance and the Governance Library or Governance Exchange tab.
- Performance-Based Reforms in SOEs: The SASAC-led reform agenda continues to reshape how state-owned enterprises are evaluated, with KPIs such as return on equity (ROE), operating cash flow, and market value management now central to performance assessments. These changes are influencing capital allocation strategies, increasing board-level activity and relevant EGM resolutions.
- Policy Support for Share Repurchases: As part of the effort to promote share repurchase and increase shareholder return, the central bank has introduced a specialized lending program to provide financing for listed companies seeking to implement share repurchase plans and has lowered the minimum requirement on the proportion of internal funds to be used for companies planning to implement share repurchase plans.
- Regulatory Alignment with Revised Company Law: To ensure conformity with the new Company Law and Implementation Regulations, the CSRC has proposed corresponding amendments to pre-existing pieces of regulation, covering areas including the transition of internal supervisory mechanisms.
- Continued Momentum in ESG Policy and Disclosure: Policies related to comprehensive green transformation have been continuously introduced, and ESG information disclosure has become an important indicator of corporate strategic development.
- Board Diversity Advancing but Momentum Slowing: Board diversity in China has seen progress in recent years, marked by a steady rise in female representation and a decrease in companies with all-male boards. However, the pace of improvement has slowed in the past two years.
- Persistent Disclosure Gaps on ByLaw Amendements: Large proportion of public companies in China failed to diclose a comparison table regarding bylaw amendments in the past three years. The percentage of bylaw amendment proposal with dislosure issues is likely to remain at a relatively high level in FY2025.
If you are not a subscriber, please contact sales@iss-stoxx.com (for institutional investors) or contactus@isscorporatesolutions.com (for corporations) to learn more about accessing bespoke governance research.
By:
Ada Lu, Harry Liu, Harry Sun, Mengzhen Zhang, Xinyi Yang, Yuan Yao, Elodie Zeng, Rui Ning Cheng, Xiao Xie
