Shanghai Stock Exchange, Model Rules of Procedure for the Board of Directors of Listed Companies

Issued: May 12 2006

Main contents: The Model Rules contain 32 articles detailing such matters as notification, convening, holding and attendance of the meetings of a board of directors, as well as the proposal and deliberation of motions, method of voting, decision-making procedure and management of files. Meetings of a board of directors may be held only when a majority of the directors are present (Article 11). If a director for some reason cannot attend a board meeting, he/she shall review the meeting materials in advance, conclude clear opinions, and authorize another director in writing to attend the board meeting on his or her behalf (Article 12). However, an independent director may not authorize a non-independent director to attend a board meeting on his or her behalf. A director may not, under the circumstance that he/she has not stated his/her personal opinion and voting intention towards the motions, unconditionally authorize another director to attend a board meeting on his/her behalf, and the concerned director also may not accept unconditional or unclear authorization. A director may not accept authorization from more than two directors (Article 13). A board of directors shall, in accordance with the company's articles of association, reach a resolution regarding guarantee matters within its scope of authority. In addition to consent from a majority of all the directors of the company, such matters must also be subject to the consent of at least two-thirds of the directors in attendance (Article 19).
Related legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p.21; PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p.31; Listed Company Governance Guidelines, Jan 7 2002, CLP 2002 No.1 p.6 and Shanghai Stock Exchange, Share Listing Rules