Since the 18th CPC National Congress, the financial system, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, has continued to promote comprehensive and strict governance of the Party, closely combined the strengthening of the Party’s leadership with the construction of a modern corporate system, and regarded strengthening corporate governance as an important focus of the transformation of the system and mechanism, and made great progress. The Fifth Plenary Session of the 19th CPC Central Committee further required that the reform of state-owned commercial banks be deepened and a modern financial enterprise system with Chinese characteristics be established, with the core of strengthening corporate governance.
Financial holding company is the mainstream mode and realistic choice to explore financial integrated management. Began in November 2020 the State Council on implementation of the decision of the financial holding company access management “(hereinafter referred to as” access control management decision of gold “), the trial measures for the supervision and administration of financial holding companies (hereinafter referred to as “control measures for the administration of gold”), to follow the macro-prudential management idea, the non-financial enterprise investment form of financial holding company in accordance with the law of access, regulation, The development of China’s financial holding company has entered a new stage of standardized development.
China everbright group co., LTD is the national “experimental field” of financial holding groups in China, and is currently actively applying for financial holding group license according to relevant regulations, striving to become a financial holding group with “fame, reality” and “presence and spirit” as soon as possible. Everbright Group will resolutely win the battle to prevent and defuse financial risks, continue to deepen financial reform, and effectively improve the quality and effectiveness of corporate governance.
● Strategic Planning Department of China Everbright Group
We will promote corporate governance of financial holding groups
At present, the significance of promoting China’s financial institutions and financial holding groups to improve corporate governance is mainly reflected in the following three aspects:
First, improving corporate governance is not only the top priority in the reform of micro financial enterprises, but also the key to preventing and defusing financial risks at the macro level. Good corporate governance is the premise and foundation for the long-term steady operation of financial institutions and high-quality economic development. On the one hand, a standardized corporate governance structure is conducive to forming effective constraints, making scientific decisions, building a good image, gaining public trust, improving market valuation, and realizing healthy and sustainable development. On the other hand, financial institutions are characterized by strong externality, high financial leverage ratio and serious information asymmetry. The defects of corporate governance often become the risk inducement or even the source of risk. The international financial crisis has fully exposed the serious problems of corporate governance in the western financial industry. At the critical time of preventing and defusing major financial risks, it is of great importance and urgency to actively improve the corporate governance mechanism and the internal and external constraint mechanism.
Second, there is still a gap between the corporate governance of financial institutions and the requirements of building a new development pattern and the requirements of building a financial system and mechanism to effectively support the real economy. China’s financial system has been formed over the years with “three layer” (that is, the shareholders meeting, board of directors, board of supervisors and senior management) as the main body of the corporate governance framework, the state-owned holding company actively explore the leadership of the party and the organic integration of corporate governance, corporate governance mechanism increasingly standardized, the effectiveness of the decision-making scientific and supervision are greatly promoted, However, some institutional problems that hinder the effective operation of corporate governance have not been fundamentally solved. Optimizing the structure of the financial system is an inherent part of the new development pattern. From the perspective of the task of the financial system effectively serving the real economy and the requirements of the high-quality development of the financial industry, there is room for improvement in the current corporate governance level of China’s financial institutions.
Third, the special risk characteristics of financial holding companies determine that good corporate governance is an important guarantee and internal requirements for their steady development. Compared with general financial institutions, financial holding company scale, diversification, correlation degree is higher, across institutions and across markets, cross-industry, cross-regional operation, easy to cause the risk of cross infection, relationship to the state’s financial security and social public interests, the corporate governance of financial holding companies to pay higher requirements and more strict specification, It is in line with the current practice of developed countries and regions in the world. From the perspective of practice, financial holding companies are not “one to control the spirit”. In recent years, China’s “de facto financial holding company” in the development of significant differences: some strong, standardized institutions through this model, optimize the allocation of resources, reduce production costs, enrich financial services, better meet the needs of customers; At the same time, there are also a small number of enterprises under the guise of financial control companies blindly expand, isolation mechanism is missing, the risk continues to accumulate, and even form a large risk. The success or failure of its operation often comes down to whether the corporate governance is standardized and effective or absent.
Grasp the key elements to optimize corporate governance
A good corporate governance of a financial holding group is mostly composed of the following elements: First, ownership structure is the premise of corporate governance. The relatively concentrated ownership structure at the group level is conducive to the shareholder balance of the parent company, while the centralized control of the parent company over the subsidiary’s equity is conducive to the realization of the group’s strategic intention and operational synergy. Second, stakeholder governance is the key issue of corporate governance. The good practice of corporate governance shows that the core competitiveness of a company and the success of its operation are the result of joint contribution and co-governance by investors, employees, creditors, customers, suppliers and other stakeholders. We should properly handle the relationship between shareholders, creditors, investors and other financial consumers, as well as the relationship between shareholders and regulators and long-term social responsibility. Third, the quality and efficiency of the board of directors and other governance bodies, which is the concentrated embodiment of a good corporate governance structure. The rules of corporate governance system should be improved, and the limits of responsibilities and legal responsibilities of controlling shareholders, actual controllers, directors, supervisors and senior managers should be clarified. Fourth, risk management and internal control system in corporate governance increasingly prominent status. The particularity of the financial industry and the financial holding company requires that the corporate governance of the financial holding group should be based on the content focus of risk management from different levels such as organizational structure, function setting, supervision and execution.
Financial holding company in China shows that the practice of financial holding group corporate governance is to solve general financial institutions in the practice of management of common problems, such as the leadership of the party and the party’s construction is weak, opaque in equity relations, shareholder behavior compliance prudence, the board of directors since the validity is insufficient, senior management responsibility orientation bias, supervision of the board of supervisors does not reach the designated position, etc.; It also needs to overcome the individual problems caused by its particularity, such as numerous stakeholders, multiple governance objectives, and complicated principal-agent relationship caused by too many levels. If an enterprise not to follow the law of the connotation of corporate governance and corporate governance, simple to meet the demand of external supervision and the “patch” or “deficit”, then the approach is easy to cause the enterprise management disorder, leading to various goals contradict each other, competing, restricting enterprise development and management risk.
Corporate governance should be based on China’s national conditions and industry realities, focus on the most prominent and pressing corporate governance problems or hidden dangers, give full consideration to the characteristics of different types of institutions, encourage innovation, respect diversity, and advocate differentiated and targeted corporate governance strategies. At present, it is urgent to build a scientific corporate governance system and mechanism as the core, gather forces from all sides, deepen financial reform, and truly establish a modern financial enterprise system with the characteristics of equal rights and responsibilities, compatible incentives and constraints, and strict risk control.
We should properly handle the “five major relations”
Over the past few years, everbright group follows the basic connotation of corporate governance, draw lessons from the experience of advanced enterprises, with “five kinds of governance system, five kinds of governance ability” as the core, with “value creation” and “management promotion” as the main line, perfect the governance structure, improve the governance ability, release the governance effect, explore the new mode of financial holding group governance with Chinese characteristics.
Its main characteristics are embodied in the “three insistence” : first, adhere to the correct political direction of corporate governance. We should give greater prominence to upholding the most fundamental requirement and principle of Party leadership, and incorporate Party leadership into the whole process of improving the system and capacity for governance. Second, adhere to the strategic guidance and value-creation orientation as the core objectives of corporate governance. Give play to the role of strategic flag raising and orientation, improve the strategic control mechanism, and use the group strategy and value creation ability to guide the management system of the subsidiary, such as authorization management, capital management, budget system, assessment and evaluation. Third, we will adhere to systematic planning and promote corporate governance reform as a whole. Effectively integrate corporate governance with risk management, internal control and other relevant systems, and form a well-coordinated corporate governance system in which each person performs his or her own duties and responsibilities, so as to avoid “fragmentation” and repeated construction of institutional design and institutional setup.
Specifically, in the practice of corporate governance, Everbright Group pays attention to the “five relations” :
First, we should properly handle the relationship between the leadership of the Party and corporate governance, and integrate the strengthening of the leadership of the Party with the improvement of the modern financial enterprise system.
The leadership of the Party is the fundamental guarantee for all financial work and the essential feature of corporate governance of financial institutions with Chinese characteristics. Everbright Group adheres to the priority of promoting the organic integration of the Party’s leadership and corporate governance, giving full play to the Party’s leading role of “guiding the direction, managing the overall situation and ensuring the implementation”, and consolidating the “root” and “soul” of state-owned financial institutions. To be specific: First, further implement the Party’s leadership into the specific requirements of corporate governance. We will formulate and improve the list of major business management matters discussed and discussed by Party committees and strictly implement them. Second, continue to explore and improve the way and path of the organic integration of the leadership of the Party and corporate governance. To study and improve the communication mechanism between the Party organizations of state-owned institutions, the board of directors and the board of supervisors. Third, adhere to the “three main” discipline inspection and supervision work pattern. Fully support and cooperate with the discipline inspection team of the Central Commission for Discipline Inspection and the National Supervisory Commission in the Group, and create a clean and upright working situation.
Second, we should properly handle the relationship between headquarters governance, subsidiary governance and subsidiary governance, and lead the construction of first-class financial holding group corporate governance with first-class headquarters management.
Corporate governance of a financial holding group involves three institutional arrangements at different levels: the governance of the financial holding company (parent company) itself, the governance of the subsidiary company (key control company) and the governance of the parent and subsidiary company. Among them, the governance at the level of the financial holding company, namely the parent company, plays a core role in the three-tier structure. In recent years, everbright group established the “construction of a control group files of the world” strategic blueprint, in accordance with the “authority headquarters headquarters, headquarters of the value, innovation” the transformation of the target, control center around the center for strategic decision making, key resources, construction of the core value of the function of the center, vigorously promotes the construction of “headquarters”, the key nodes and outstanding short board governance in headquarters. To be specific, first, we will improve the scientific decision-making and authorization system. Decision-making mechanism is the most important mechanism of an enterprise, and authorization system is the most important system of an enterprise. In recent years, Everbright Group has continuously optimized the decision-making matters of shareholders’ meetings and the board of directors, focusing on improving the efficiency of decision-making, and improving the decision-making mechanism and authorization system day by day. Second, strengthen the decision-making mechanism of “three, one and one” and improve the decision list of the general manager’s office meeting. Adhering to the collective decision-making of “triple and one major” matters is the concrete implementation and implementation of the Party committee of Everbright Group to the central government’s “triple and one major” decision-making requirements. The inventory system is clear and clear, which is beneficial to clear the authorized division of labor of each decision-making subject, and is convenient for scientific decision-making. “Inventory system” is at the forefront of the industry and plays an important role in improving the corporate governance mechanism of the Group. Third, we will give full play to the role of various governance bodies. In SOEs, different governance bodies, such as Party committees, shareholders’ meetings, boards of directors and boards of supervisors, all play an important role and jointly promote the reform and development of SOEs.
Third, we should properly handle the relationship between group governance and the management and control of subsidiary companies, “one enterprise, one policy, different policies”, and strive to promote the scientific and effective development of the group governance model.
In recent years, Everbright Group adheres to the strategic goal of building a world-class financial holding group. Through “making finance better, making industry better”, Everbright Group continues to build its core competitiveness. Its distinctive advantages in “wealth management” and “people’s livelihood service” are becoming more and more distinct. To be specific, the first is to improve the group’s management and control system for its affiliated companies. Continue to optimize the strategic positioning of headquarters and subsidiaries, supervise the effective management and control of subsidiaries, reasonably divide responsibility boundaries, and optimize the decision-making authorization process; A full-chain capital operation management system covering capital measurement, planning, allocation and assessment should be actively established. Strengthen control in key areas such as personnel, investment and brand name management; To sort out control matters and effectively implement the system of sending full-time board of directors, financial directors and risk directors to the Group; Further strengthen the key enterprises flat, penetrating management. The second is to promote “thin body fitness” and integration and reorganization work. Promote the optimization of group management by “slimming and keeping fit”, continuously push forward the compression of legal person level and management level, and form a clear and concise equity relationship; We will explore the establishment of a dynamic equity management mechanism and an early-warning mechanism for inefficient and invalid assets, focus on competitive industries such as “wealth management” and “people’s livelihood services”, give priority to strategic emerging fields, and strive to create “Everbright’s new business card”. Third, digital construction is to consolidate the foundation of group governance. Group financial information system construction, for example, advance the covering capital, money, budget accounting, statistics, and financial information system construction and so on seven big plates, through the financial data governance mechanism, make group data together, running, up and up, making digital transformation of the financial holding group governance foundation innovation management mode, to consolidate the new engine.
Fourth, we should properly handle the relationship between efficiency and risk, development and safety, and take risk management and internal control construction as the core content of corporate governance.
The special business characteristics of financial holding group determine the extreme importance of risk prevention and control, and it is a major proposition for Everbright Group to prevent and resolve all kinds of risks. Everbright Group is committed to improving the “three fronts and four walls”, establishing a comprehensive risk prevention and control system for the Group, and creating a solid barrier for high-quality development. To be specific, first, we will strengthen the construction of a risk preference system. To scientifically determine the group’s risk tolerance and risk limits for all kinds of risks, improve the risk isolation mechanism, strengthen the management of related transactions, ensure compliance with regulatory requirements, form a two-way drive of “top-down design” and “bottom-up check”, and construct a safety protective net for risk management. Second, we will strengthen risk monitoring and early warning. Establishing a forward-looking risk monitoring and early warning system; Strengthen the control of concentration with key customers as the center; Creative construction of internal control dynamic evaluation system; Standardize the management of “Everbright” trademark brand, move the risk prevention and control gate forward, and improve the forward-looking risk prevention and control system. Third, explore the intelligent risk control mode. By using big data, cloud computing, artificial intelligence and other technologies, we will build an automated and intelligent risk management information platform to promote the Group’s risk management from “human-controlled” to “machine-controlled” and then to “intelligence-controlled”.
Fifth, we should properly handle the relationship between corporate governance and various management systems, and work hard on “the integration of the system, the scientific nature of decision-making and the effectiveness of supervision”.
The management strategy of the financial holding group should emphasize the resultant force, and cannot “see the forest for the trees”. In practice, Everbright Group focuses on the relationship between the construction of the governance system and the improvement of governance capacity, effectively integrates the “five governance systems” and “five governance capabilities”, and initially forms an integrated corporate governance system in which each party performs its own duties in a cohesive and orderly manner.
On the one hand, we will focus on building five governance systems. First, the construction of group management and control system. We will improve the mechanism for strategic management and control, control the progress of the implementation of strategies, and strengthen their guiding role. Second, business development system construction. Optimize the industrial layout of “big wealth” and “big people’s livelihood”, highlight the strategic characteristics of the six E-SBU ecospheres, improve the E-SBU collaborative core system and Everbright Cloud Life Super APP, and give full play to the advantages of economies of scale and economies of scope of financial holding groups. Third, the construction of incentive and restraint system. We issued the 27 guidelines for encouraging cadres and employees, and deepened the market-based selection and appointment system. We will intensify exchanges among officials on job rotation, hold them accountable, and conduct auditing and supervision. Strive for a substantial breakthrough in equity incentive, project investment and other aspects. Fourth, we will build a system for scientific and technological innovation. The scientific and technological innovation strength of Everbright Group has improved rapidly, especially the scientific and technological innovation of the Group headquarters has achieved new breakthroughs. Fifth, the construction of enterprise culture system. Advocating “home, sunshine, business, responsibility” and “feelings, quality, characteristics, innovation, bottom line, public praise, vitality, responsibility” values, issued a new song, flag, badge, corporate culture system construction to stimulate the business vitality of all Everbright people.
On the other hand, we will focus on improving the five governance capacities. First, enhance the capacity of team building. Leading cadres at all levels of Everbright enterprises have resolutely implemented the major strategic arrangements of the central government through the implementation of “one post and two responsibilities”. The strength and effect of the implementation of the system as an important content of all levels of group evaluation. Second, we will enhance our capacity for deepening reform. The modernization of the governance system and capacity will be the focus of the reform, and the reform will help the Group develop in high quality. Third, we will enhance our capacity for scientific and technological innovation. The Group’s scientific and technological innovation strength has been rapidly improved, and the scientific and technological enablement has been significantly improved, and the innovation vitality has been continuously stimulated. Fourth, we will improve our ability to inspect and handle inspections. Enterprises and individuals who fail to implement the Group’s important decisions and deployments in a timely manner should be held seriously accountable. Fifth, we will enhance our ability to lead the cultural sector. Let everbright culture externalize in the practice, internalize in the heart, let corporate culture become the soft power to promote the improvement of governance efficiency.
Everbright Group will be the “vanguard” and “experimental field” of financial control groups, and strive to form an all-directional, whole-process, all-covering, orderly and cohesive modern corporate governance system for financial enterprises in two or three years. On this basis, it will take another two or three years to promote the Group’s governance system and capacity to reach or close to the world-class level, become the best governance practice of scientific decision-making, effective incentives and strict supervision, and make new and greater contributions to the construction of the governance model of financial holding companies with Chinese characteristics.