Board of directors governance

The good corporate governance originates from a board of directors in a good state. As the core of the corporate governance framework, boards of directors are essential to the effective operation of all other governance elements (Such as the control environment, shareholder behavior, disclosure and transparency policies of companies). Boards of directors perform governance and supervision duties for companies in various ways. However, according to our experience, there are many common problems existing in boards of directors, which hinders the ability of boards of directors to perform these functions effectively.

These problems include:

·     The roles and responsibilities of boards of directors are not clear and / or overlapped with management functions;

·     Directors fail to understand or assume responsibilities fully as the members of boards of directors;

·     The composition of boards of directors is unreasonable and short of appropriate skills, experience or objectivity;

·     There is no appropriate or effective board of directors committee;

·     The procedure design of boards of directors is improper, which restrains the efficiency and effectiveness of boards of directors.

What can we do?

The following is a summary on the typical board advisory service we provide for companies:

·    Comprehensive board of directors assessment

·    Working plan and procedure of boards of directors

·    Authorization systems of shareholders' meetings, boards of directors and management layers

·    New director induction program

·    Composition of boards of directors / selection of director candidates

·    Director training and board of directors seminar

·    Functions and operation of board of directors offices

Comprehensive board of directors assessment

According to international corporate governance standards, the necessarily of the assessment on the effectiveness of boards of directors is emphasized increasingly. For example, it is stipulated in the UK "Corporate Governance Code" that "Boards of directors shall conduct a formal and rigorous annual assessment on their own performance." The assessment mechanism for board of directors governance was also mentioned again in the "Code of Corporate Governance for Listed Companies in China" published at the end of September, 2018.

In fact, the assessment process of the boards of directors of the ninety-three percent of the 2018 top 100 companies of the United States at least was disclosed. The assessment of boards of directors is becoming an effective tool to improve the governance of boards of directors.

We adopt the international leading corporate governance methodology to provide the assessment service for the boards of directors of firm clients. The corporate governance team of KINGPARALLEL makes effective use of questionnaires, one-to-one interview, closed door meetings and other methods to conduct qualitative and quantitative analysis and research on the effectiveness of boards of directors as a whole, special committees of boards of directors and directors according to the preset objectives. Some specific suggestions are made according to assessment results. The assessment process is shown in the following figure:

The characteristics of the board of directors assessment service are as follows:

·    Professionalism: With the domestic leading experience and knowledge, our professional team has been in the field of corporate governance for sixteen years.

·    Independence and objectivity: As a third party independent of the internal governance subject of companies, we have an objective perspective independent of companies, so we can find some problems that we fail to explore or communicate about in the inherent situation.

·    Confidentiality: The confidentiality of information and the authenticity of feedback are ensured by our survey tools and assessment methods.

Director training and board of directors seminar

We provide the director training and seminar service with a variety of topics for boards of directors. These topics include:

·     Development trend and focus of corporate governance at home and abroad

·    How to build a strategic board of directors

·    Crisis management of boards of directors

·    Functions and roles of boards of directors

Director candidate search

We select and recommend suitable independent director candidates for firm clients, provide the background investigation service and assist in the enrollment of new directors by making use of our deep experience and extensive network in the field of corporate governance.