China Banking and Insurance Regulatory Commission, Measures for the Evaluation of the Performance of Directors and Supervisors of Banking and Insurance Institutions (Trial Implementation, Draft for Comments)

Issued: January 29, 2021

Main contents: Banking and insurance institutions are encouraged, in light of their own circumstances, to engage independent third parties, such as external experts or market intermediaries, to assist them in conducting evaluations of the performance of their directors and supervisors. A banking or insurance institution with a corporate governance regulatory evaluation grade of less than D for two years consecutively shall engage an independent third party to assist it in launching its work of evaluating the performance of its directors and supervisors (Article 32).

The Measures set forth eight circumstances under which a "one-vote veto" may apply, where directors and supervisors may be directly rated as "incompetent". These include the disclosure of trade secrets; the acceptance of improper benefits in the course of performing their duties or the exploitation of their position as a director or supervisor for personal gain; the participation in or assisting of shareholders in improperly interfering with the banking or insurance institution, resulting in the banking or insurance institution being exposed to material risks and losses, etc. (Article 36).