China's SOEs show devotion in corporate governance

A survey on the corporate governance standards of companies listed in Hong Kong, which was released here on Tuesday, found that current level of corporate governance has improved significantly since 2009.

The survey was jointly conducted by the Hong Kong Institute of Directors and Hong Kong Baptist University.

A total of 121 listed companies in Hong Kong are assessed for their corporate governance performance based on the five principles of corporate governance -- rights of shareholders, equitable treatments of shareholders, role of stakeholders, disclosure and transparency, and board responsibilities.

The first report of such was published in 2004, and the latest set of findings is the fourth, which have shown great improvements over the years, said the two organizations in a statement.

Six out of the top ten firms with the best corporate governance practices are state-owned or backed with funding from China's mainland, reflecting that many large state-owned enterprises' management have devoted the time and resources needed to improve transparency, to clarify the power and responsibilities of the board of directors, and to enhance their firms' corporate social responsibility efforts.

The six firms from the Chinese mainland are Bank of China, China COSCO, China Life, ICBC, Lenovo Group and CNOOC.

"We are pleased to see the standards have improved, especially among state-owned companies, which show that their Boards of Directors are beginning to attach greater importance to corporate governance," said Kelvin Wong, chairman of the Hong Kong Institute of Directors.

In general, the corporate governance practices in rights of shareholders, equitable treatment of shareholders, role of stakeholders and disclosure and transparency have shown an upward trend. Nevertheless, there is still room for improvement on board responsibilities in the future, he said.