The Key Battle Of Corporate Governance

The battle between Baowan and Wanzhou has long been over, but the "gongdou drama" and "spy film" staged in the capital market for the control of listed companies have never stopped. The "melon watching masses" who do not know the inside story are dazzled and at a loss, so they have to choose to vote with their feet to stay away from right and wrong.

The "three committees and one layer" corporate governance structure, which should be harmonious and co-development, has become the main battlefield of both sides in the dispute of controlling rights. How the directors of listed companies perform their duties in the smoke of gunpowder has become the focus of market attention.

What is the fight for equity?

The struggle for control cannot be avoided by holding an extraordinary general meeting of shareholders and re election of the board of directors.

Recently, a listed company of information software has attracted extensive attention from the market due to the dispute of controlling shares. Throughout the whole process of competition, both sides of the offensive and defensive sides "point to wheat awn", attack shareholders with fierce attack and sharp language, defend shareholders' endless hidden needles, and exchange time for space to play Taiji. Among them, there are many arguments about "public speaking is reasonable, and women are also strong in reasoning"

One is whether the board of directors has the right to review the compliance of shareholders' proposals. When the shareholders propose to the board of directors or the board of supervisors to hold an interim general meeting of shareholders, the board of directors and the board of supervisors raise objections before the deadline on the grounds of not receiving the application documents of shareholders, the form of the documents is not in conformity with the provisions of the proposal, etc. The shareholders believe that the holding of an extraordinary general meeting of shareholders is a right conferred by the company law. The board of directors shall give a written feedback on whether or not it agrees to hold the meeting within 10 working days after receiving the shareholder's proposal. The board of directors has no right to review the shareholder's proposal and the content of the proposal. The board of Directors believes that as the convener of the general meeting of shareholders, it has the obligation to review the legality and compliance of the proposer's qualification, submission time, proposal form and other aspects in accordance with laws and regulations, normative documents and relevant provisions of the articles of association, so as to screen out the authenticity and accuracy of relevant information.

Second, which circumstances should be identified as the refusal of the board of directors to hold a general meeting of shareholders. If the shareholders think that the board of directors raises objections such as non-compliance of documents and illegal proposals, it is deemed that the board of directors refuses to hold the meeting, and the shareholders have the right to propose to the board of supervisors. However, the board of directors thinks that it is its right to review the form and legality of the documents and raise objections. The board of directors has not refused to hold the meeting, and the shareholders have no right to propose to the board of supervisors.

The third is whether the change of the meeting time needs the consent of the proposed shareholders. The shareholders think that the time of the shareholders' meeting is an important component of the shareholders' proposal. If the board of directors changes the convening time of the shareholders' proposal, it is necessary to obtain the consent of the proposing shareholders in advance. However, the board of Directors believes that the convening time of the shareholders' meeting does not belong to the deliberation of the shareholders' meeting, so it is not the content of the shareholders' proposal, and the board of directors has made the same within 10 days after receiving the shareholders' request The board of directors has the right to decide the time of the general meeting of shareholders. The change of the time does not belong to the change of shareholders' proposal and does not need the consent of shareholders.

Fourth, whether the doubt of shareholders' qualification constitutes a substantial obstacle to the convening of the extraordinary general meeting of shareholders. After the notice of the general meeting of shareholders is issued, the board of directors of the company discloses the announcement that the third party sues the shareholders and damages the interests of the shareholders. The board of directors held that the matters involved in the relevant litigation led to the uncertainty of the shareholders' voting rights and whether the shareholders were qualified to apply for the shareholders' meeting. Before the judgment took effect, the above uncertain factors could not be eliminated, and the board of directors decided to postpone the convening of the shareholders' meeting.

All these are the same. For example, the board of directors of a material listed company disagrees with the disclosure of the equity change report due to the lack of reference documents for the equity change report issued by the shareholders, the failure to disclose other shareholders' giving up the priority to increase capital, and the qualification of the financial consultant employed is questionable. Then, the board of directors of a material listed company disagrees with the disclosure of the equity change report on the basis of the 60 th section of the administrative measures for acquisition The shareholder's application for holding a general meeting of shareholders was rejected. A listed company in the Internet service industry did not submit the document to all directors or notify the board of directors to consider the shareholders' proposal after receiving the proposal from the largest shareholder to remove several directors and supervisors.

It is the board of directors that plays an important role in the governance and development of listed companies. It is not difficult to find that the focus of fierce disputes among shareholders is the fight for the seat of the board of directors. The "out of office shareholders" hope to change their directors by holding the general meeting of shareholders, while the "ruling shareholders" hope to set up many obstacles to the appeal of "non shareholders" by controlling the majority of the board members. Therefore, whether the general meeting of shareholders to replace directors can be held smoothly has a decisive impact on the situation of dispute.

Fighting openly and secretly, directors are in trouble in performing their duties

The long-lasting dispute over control rights may lead to the instability of internal governance structure, weakening of internal control system, failure of decision-making mechanism, fuzzy business thinking and direction, loss of core talents, unstable mentality of employees, and damage to the overall image of Listed Companies in the capital market, and ultimately damage the interests of shareholders.

For example, all directors of * ST Zhaoxin, affected by the struggle for control, all proposed to resign before the disclosure of the annual report in 2019, but the original staff still need to continue to perform their duties before the new directors are re elected. It is the legal obligation of listed companies to disclose the annual report on schedule, but the directors who have to perform their duties are not diligent. Therefore, although all directors agree to disclose the annual report, they do not guarantee the authenticity, accuracy and completeness of the annual report, which makes the market gape.

In addition, in the process of the game between the "ruling shareholder" and the "non shareholder", most of the directors elected by the two sides bear the "identity", which leads to that in the process of performing their duties and making decisions, directors may simply "stand in line" to express the intention of the shareholders behind them. Even some directors become the "puppets" of the major shareholders. When making decisions, they do not consider the overall interests of the listed companies, blindly meet the interests demands of the major shareholders, turn a blind eye to the behaviors of the major shareholders that damage the interests of the company. They become the "tools" and "coats" for the major shareholders to empty the assets of the listed companies, ignore the relevant laws and regulations, and forget the interests of the small and medium shareholders They lack the awe of laws and regulations and go their own way.

Return to the source, directors should be cautious in performing their duties

There is a ruler in the heart, and there is a limit to action. As a member of the company's decision-making body and the core of corporate governance, the responsibility of directors is self-evident. Under the corporate governance framework of "three meetings and one layer", directors express their opinions on major issues on the premise of full discussion and repeated weighing according to their professional expertise and knowledge level, so as to help the listed companies develop well. In the competition for shares, directors should take the overall interests of the company as the primary goal, act diligently, keep the heart of right and wrong, minimize the impact on the normal operation of the company, and firmly safeguard the interests of listed companies.

In order to regulate the directors' responsibility for performing their duties, the new securities law has increased the punishment responsibility for directors, and the new delisting rules also add more than half of directors' inability to guarantee the authenticity of annual reports or semi annual reports. According to statistics, in 2020, the Shenzhen Stock Exchange punished 226 directors of 116 sub companies for their failure to fulfill their duties, intensified the crackdown on the directors who failed to fulfill their duties, compacted the main responsibility of directors, and tried to improve the chaos of directors' performance.

Directors' diligence is an important standard to judge whether the governance of listed companies is sound. 2021 is the key year of "three-year action" of corporate governance, and it has become a clear goal to improve the quality and efficiency of the board of directors. Only by distinguishing right from wrong and being diligent and conscientious, can directors comprehensively improve the level of corporate governance and management, and realize the continuous improvement of company quality.

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