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China's Listed Companies to Be Better Supervised
China's securities authorities released regulations Tuesday establishing an independent director system for listed companies, which marked a major move to improve corporate governance in public firms.
Wednesday's China Daily said that the move, announced earlier this year but formalized this week, requires all domestically listed companies to hire at least two independent board directors by next June 30.
According to a circular issued by the China Securities Regulatory Commission that by June 30, 2003, no less than one- third of the boards of directors of listed companies should have independent directors who "take no position other than as a board director and have no relationship with the company or its major shareholders that may affect independent and objective decision- making."
At least one of the independent directors should be a professional accountant, it said.
The system is expected to protect the interest of small and medium shareholders and enhance transparency in listed companies.
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