China Business Leaders Forum Corporate Governance .doc

Document Sample
China Business Leaders Forum Corporate Governance .doc Powered By Docstoc
					                                China Business Leaders Forum

      ‘Corporate Governance – enhancing China’s competitive advantage’


The China Business Leaders Forum’s 16th meeting in Beijing addressing the critical issues faced by
business on corporate sustainability and including the official launch of the China Centre for
Corporate Sustainability, held at the Grand Skylight Catic Hotel on 26th November 2010.

                                       Summary of Proceedings



Introduction and Background to the Conference
The China Business Leaders Forum (CBLF), see below for more information, is a partnership initiative
between the School of Public Administration at the Renmin (People’s) University of China and the
International Business Leaders Forum (IBLF) that has enabled Chinese and foreign businesses to
meet regularly over the past 5 plus years to explore issues of common concern in the field of
sustainable and responsible business practice. The partners have now joined with the China Stone
Management Consulting Group to create the China Centre for Corporate Sustainability (CCCS) as a
local not-for-profit enterprise with full time staff, to enable the work of the CBLF to be taken to a
new level of activity and impact and to become a centre of excellence on corporate responsibility
serving the needs of companies operating in China and overseas.

To celebrate the launch of the new centre, CBLF held a major conference on corporate sustainability
on 26th November 2010, with the support of the GTZ Sino-German Corporate Social Responsibility
Project and the Embassy of Sweden. The objective of the conference was to explore how the
government and the private sector in China are responding to the social, economic, environmental
and governance challenges that they face at home and overseas. This paper summarises the main
outcomes of the conference.

‘Corporate Governance – enhancing China’s competitive advantage’ - Setting the scene for the
conference
The title of the conference was chosen because of the growing evidence that for enterprises to
achieve sustained success in performance and to enhance their access to markets, supplies and
investment capital, they need to demonstrate that:
     they are being managed with integrity and transparency;
     they understand the importance of seeking harmony and balance between their economic,
         social, environmental and governance needs and challenges;
     they value the communities in which they operate; and
     they manage their businesses in ways which are financially sustainable but also contribute
         to society in general.

The term ‘Corporate Governance’ encompasses the policies and practices that enterprises adopt to
ensure that their operations are well managed in all aspects – financial, human, environmental and
ethical – and it goes beyond corporate social responsibility (CSR) or corporate citizenship. It is a core
business approach designed to gain competitive advantage by being the enterprise of choice in
creating long-term shareholder, employee, customer and community values and to reduce business
risks.

The conference gave the opportunity for over 150 attendees to share some of the latest
developments and thinking in the field of corporate governance.

The Agenda
                Content                                            Speaker
Welcome & opening remarks                         Professor Dong Keyong, Dean, School of Public
                                                  Administration, Renmin University of China

                                                  Mr Jakob Kiefer, Minister Counsellor, Economic
                                                  Affairs, Embassy of Sweden
Setting the scene – why good corporate            Ms Clare Melford – Chief Executive Officer, IBLF
governance will enhance China’s competitive
advantage                                         Mr Peter Brew – Director, Asia Pacific, IBLF
Corporate Governance – what it means in           Mr Albert Helmig, President, Hong Kong
practice                                          Mercantile Exchange

                                                  Ms Zhao Aili, Vice President and Regional
                                                  Compliance Officer, Siemens Ltd., China
China’s energy-saving and emission-reduction      Mr Wang Xiaofang, Chief of Department of
opportunities and the development of strategic    Development and Planning, Ministry of Science
emerging industries                               & Technology
The philosophy of entrepreneurs regarding         Mr Liu Guangxi, Vice Mayor, Kunming Municipal
corporate governance                              Standing Committee
Open discussion                                   Moderated by Professor Dong Keyong
The achievements of CBLF and the launch of        Ms Clare Melford introducing by video, Mr
CCCS                                              Neville Isdell, Chairman, IBLF and former global
                                                  Chairman and Chief Executive Officer, Coca-Cola

                                                  Mr Peng Jianfeng, President, China Stone
                                                  Management Consulting Group
Reform of the Boards of Directors of state-       Mr Zhou Fangsheng, former Deputy Secretary,
owned enterprises in China                        Bureau of Enterprise Reform, State-owned
                                                  Assets Supervision and Administration
                                                  Commission of the State Council (SASAC)
Environmental Management in China – the latest    Ms Beatrice Schaffrath, Partner, Baker &
priorities                                        McKenzie LLP
ISO 26000 ‘Guidance on Social Responsibility’ –   Mr Andreas Edele, Senior Project Manager, GTZ
potential impacts on global supply chains         Sino-German Corporate Social Responsibility
                                                  Project
Open discussion                                   Moderated by Mr Peng Jianfeng
Launch of a new publication – ‘The State of        Ms Dai Yibo, Director of CSR Consulting, China
Responsible Competitiveness 2009 – Seizing the     WTO Tribune - in association with the Embassy
low carbon opportunity for green development       of Sweden
in China’
Final summary                                      Mr Peter Brew

Highlights from the Presentations
Copies of the PowerPoint presentations used by the speakers are available on the CBLF website –
www.cblf.org.cn – but the key themes can be summarized as follows:

   A) Corporate Governance – what it means in practice
   Mr Albert Helmig, President, Hong Kong Mercantile Exchange focused on the role of Boards of
   Directors in overseeing the governance of enterprises and in particular the increasing
   contribution that is demanded from non-executive or independent directors both from the
   strengthening of company law around the world and from the increasing demands of
   shareholders. If they are to be effective they need to be given access to coaching or training for
   their roles and to be prepared to make their voices heard at Board Meetings and in Board
   Committees. Mr Helmig also explored the arguments for separating the duties of Chairmen and
   Chief Executives.

   Mr Helmig then shared with the conference how the new Hong Kong Mercantile Exchange has
   put in place comprehensive governance arrangements to provide a stable and reliable
   environment for traders, intermediaries and end-users of commodities.

   Ms Zhao Aili, Vice President and Regional Compliance Officer, Siemens Ltd., China shared with
   the conference the experience of Siemens as a global company that had operated successfully
   for over 100 years within a framework of strong corporate values. However during the 1990s
   their attention to ensuring compliance with company policy and practices around the world had
   weakened and in 2006 the company was charged by the authorities in the United States and
   Europe with failing to prevent a number of incidents of corruption within its operating
   companies in Latin America, the Middle East and Asia. In response the company fundamentally
   restructured its internal compliance procedures and mechanisms, replaced its senior
   management team and Board, reached out to the wider business community within its sector
   and in its key markets to promote collective action to fight corruption and reached financial
   settlements with the authorities that acknowledged the full cooperation that the company had
   given to the enquiries. It is now sharing openly its experience and its commitment to pursue
   ethical business practices by including formal integrity and compliance pacts in its relationships
   and transactions.

   Ms Zhao also announced that as part of its settlement, Siemens had established a new Siemens
   Integrity Initiative with the World Bank to make available US$100 million over the next 15 years
   to support initiatives that promote collective action by business in fighting corruption around
   the world. An announcement about the first group of projects to be funded was to be made on
   9th December 2010.
B) China’s energy-saving and emission-reduction opportunities and the development of
     strategic emerging industries
Mr Wang Xiaofang, Chief of Department of Development and Planning, Ministry of Science and
Technology emphasized the Government of China’s commitment to pursuing a low carbon
economy and to providing international leadership in taking its policy to practice. Good progress
has already been made in meeting the targets set for reducing emissions and active steps are
under way to meet the target of 15% of energy from non fossil fuels by 2020. Strong economic
development has brought with it the challenge of environmental degradation and pollution that
is a risk to health and living conditions.

Mr Wang then shared a number of practical examples of government experiments in a range of
new energy sources – nuclear, wind and solar. China used the 2008 Olympic Games and the
2010 Shanghai Expo as launching pads for the application of green technology and the
experiments are well advanced and producing encouraging results. The next stage of
development will be to engage with the commercial sector to encourage innovation and further
sustainable development of these new approaches.

C) The philosophy of entrepreneurs regarding corporate governance
Mr Liu Guangxi, Vice Mayor, Kunming Municipal Standing Committee made a strong plea to the
conference not to allow excessive concerns about the environment, climate change and
governance to deflect enterprises and entrepreneurs from their primary priority of profitable
engagement with the market economy. He reminded delegates that the socialist market
economy principles set out by Deng Xiaoping had served China well both economically and
socially and it would be foolhardy to interfere with a process that had brought so much value to
the country.

D) Reform of the Boards of Directors of state-owned enterprises in China
Mr Zhou Fangsheng, former Deputy Secretary, Bureau of Enterprise Reform, State-owned Assets
Supervision and Administration Commission of the State Council (SASAC) presented a summary
of SASAC’s latest thinking on the future governance of state-owned enterprises in China.
Following a review of current practices and trends on corporate governance in the United States
and Europe and an assessment of their strengths and weaknesses in the light of the recent
financial and banking crisis SASAC had identified a framework of governance that drew from this
review but adapted it to meet China’s needs and conditions. In particular SASAC has decided to
appoint independent directors to help oversee the management of enterprises. They will be
retired, experienced executives that will have the time available to perform their duties
diligently. In each case they will be from a different business sector than the enterprise, to avoid
any conflicts of interest, and will be required to provide SASAC with an annual report on the
performance and decision making of the management team. They will also each undergo an
assessment of their own performance annually. On the wider issues of corporate governance
state-owned enterprises are being encouraged to take account of the 10 principles of the UN
Global Compact and to publish annual sustainability reports using Global Reporting Initiative
standards.

E) Environmental Management in China – the latest priorities
   Ms Beatrice Schaffrath, Partner, Baker & McKenzie LLP brought conference delegates up to date
   with national and international progress on the development and implementation of protocols
   and initiatives on environmental management and climate change. There is clearly a growing
   understanding of the need for a comprehensive approach to low carbon solutions, reducing
   emissions of all kinds and reducing and managing the increasing volumes of commercial and
   domestic waste. Government departments are cooperating better than before and there are
   clear signs of emerging technical innovation that can now be taken to scale and made
   economically viable. Response to the social and economic consequences of climate change is
   taking longer and it will be important for the global community to reach some collective
   agreement at the upcoming climate conference at Cancun, Mexico in early December.

   F) ISO 26000 ‘Guidance on Social Responsibility’ – potential impacts on global supply chains
   Mr Andreas Edele, Senior Project Manager, GTZ Sino-German Corporate Social Responsibility
   Project presented details of the recently published and long-awaited ISO 26000 guidelines on
   social responsibility. He gave a profile of the complex process that had been followed to consult
   widely and to gain comprehensive commitment from participating national and international
   bodies. Although there were still some reservations among participants the fact that ISO 26000
   is a set of guidelines rather than prescriptive rules had helped to gain overall acceptance. Mr
   Edele went on to review the impact that the new guidelines may have on the management of
   supply and distribution chains, emphasizing the importance of large companies giving assistance
   and training to the small enterprises along their value chains.

   G) Launch of a new publication – ‘The State of Responsible Competitiveness 2009 – Seizing
       the low carbon opportunity for green development in China‘
   Ms Dai Yibo, Director of CSR Consulting, China WTO Tribune presented the findings of a research
   conducted in partnership with the Embassy of Sweden and published in a new book ‘The State of
   Responsible Competitiveness 2009 – Seizing the low carbon opportunity for green development
   in China’. The study had reviewed China’s performance in adapting to the needs of a low carbon
   economy and how that compared with its economic competitors. It also identified key areas for
   improvement, including the need for China to better inform its international partners on the
   progress it is making.

The Story of the China Business Leaders Forum
The China Business Leaders Forum (CBLF) was launched in March 2005 to provide a ‘safe haven’ for
leaders of Chinese and foreign companies/organizations to meet regularly to share experience and
good practice and to collectively develop a sustainable framework of corporate governance to be
promoted across the wider business community. It has so far conducted 16 roundtables in Beijing
and 8 in Shanghai where participants discuss the improvement in responsible business practice by
applying principles of integrity and transparency to corporate social, economic and environmental
performances. Key topics have included:
   corporate governance;
   tendering and procurement;
   recruitment and development of employees;
   corporate social responsibility & sustainability;
   business responsibility for health & safety;
   transparency within business relationships and dealings;
  cross-cultural management of multinational employees, markets and supply & distribution
   chains;
  enhancing business through greater transparency;
  design & transparency of stockownership plans;
  challenges to the sustainability of business;
  transparency in crisis management;
  world economic crisis and its causes and impacts (a series of three events); and
  “green” energy – the opportunities and challenges for China.

Discussion summaries and a collection of relevant international materials (which has been adapted
and translated into Chinese) are available at its bilingual website (www.iblf.org.cn).

In its initial five plus years of activity CBLF has engaged over 600 people and has begun a process of
discussion and debate, building confidence that a business-led and locally managed initiative to
mobilize the business community in China around the challenges of meeting international business
standards can produce real results. It has carefully built consensus and support amongst both
Chinese and foreign companies/organizations and has found the platform from which engagement
with government can be built. The creation of the China Centre for Corporate Sustainability (CCCS)
provides a local vehicle through which the work of CBLF can be taken to a new level of activity and
impact to the benefit of Chinese and foreign companies alike.

A brief ceremony was held during the conference to mark the launch of the new centre at which:
  Ms Clare Melford, the Chief Executive Officer of the International Business Leaders Forum
      (IBLF) introduced a video message from the organisation’s Chairman Mr Neville Isdell – who
      recently retired as global Chairman and Chief Executive Officer of the Coca-Cola Company – in
      which he acknowledged China’s vital role in the next phase of the world’s economy and its
      importance to the work of IBLF. He also expressed sincere appreciation to Professor Dong
      Keyong for all his support and guidance of the CBLF over the past 5 years and to Mr Peng
      Jianfeng for his support in setting up the new centre; and
  Mr Peng Jianfeng, President of China Stone Management Consulting Group, emphasised the
      importance of improving governance across China’s industries, using the challenges of food
      security and safety as a particular example, and the role of the new centre in transforming
      business practice and thereby strengthening China’s economy.


Peter Brew
13th December 2010

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:3
posted:10/24/2012
language:English
pages:6
handongqp handongqp
About