The China Securities Regulatory Commission revised and issued the “Governance Guidelines for Listed Companies” to take effect on January 1, 2026

Zhitong Finance App learned that the China Securities Regulatory Commission has revised the “Governance Guidelines for Listed Companies”, which will take effect on January 1, 2026. The current revision of the “Governance Code” mainly includes the following elements: First, improving the supervision system for directors and senior management, implementing comprehensive regulations in terms of appointment, performance, and separation, and urging directors and executives to perform their duties faithfully and diligently.

Second, improve the incentive and restraint mechanism for directors and senior management, require listed companies to establish a remuneration management system, stipulate that the remuneration of directors and executives matches the company's operating performance and personal performance, and promote better binding of interests between directors and executives.

The third is to regulate the behavior of controlling shareholders and actual controllers. Strictly restrict competition in the same industry, which may have a significant adverse impact on listed companies, and further improve the review responsibilities and decision-making requirements for related transactions.

Fourth, make good connections with other rules. According to the “Securities Law”, “Administrative Measures on Independent Directors of Listed Companies”, etc., regulations such as the rights to publicly solicit shareholders and the responsibilities of board nomination committees and remuneration and assessment committees have been improved to enhance the coordination of rules.

The original text is as follows:

Governance guidelines for listed companies

Chapter I General Provisions

Article 1. In order to regulate the operation of listed companies, raise the level of governance of listed companies, protect the legitimate rights and interests of investors, and promote the stable and healthy development of China's capital market, these guidelines are formulated in accordance with the basic principles determined by the “Company Law of the People's Republic of China” (hereinafter referred to as the “Company Law”), the “Securities Law of the People's Republic of China” and related laws and administrative regulations, drawing on the practical experience of domestic and foreign corporate governance.

Article 2. These standards apply to joint stock companies established in accordance with the “Company Law” and whose shares are listed and traded on stock exchanges in China. Listed companies should implement the spirit set out in these guidelines and improve corporate governance. Listed companies' articles of association and governance-related documents shall meet the requirements of this Code. Encourage listed companies to explore and enrich corporate governance practices according to their own characteristics and raise the level of corporate governance.

Article 3 Listed companies shall implement the development concept of innovation, coordination, green, openness and sharing, promote outstanding entrepreneurship, actively fulfill their social responsibilities, and form good corporate governance practices. The governance of listed companies should be sound, effective and transparent, strengthen internal and external supervision checks and balances, protect the legal rights of shareholders and ensure that they are treated fairly, respect the basic rights and interests of stakeholders, and effectively enhance the overall value of the enterprise.

Article 4 Shareholders, actual controllers, directors, and senior managers of listed companies shall exercise their rights and perform their duties in accordance with laws, administrative regulations, departmental regulations, regulatory documents (hereinafter collectively referred to as laws and regulations) and self-regulatory rules to safeguard the interests of the listed company. Directors and senior managers should continue to learn, continuously improve their ability to perform their duties, and perform their duties faithfully and diligently.

Article 5. In listed companies, an organization of the Communist Party of China shall be established to carry out party activities in accordance with the provisions of the “Company Law”. Listed companies shall provide the necessary conditions for the activities of the party organization. State-owned listed companies include requirements relating to party building work in their articles of association in accordance with the “Company Law” and relevant regulations, taking into account actual corporate equity structures, management, etc.

Article 6. The China Securities Regulatory Commission (hereinafter referred to as the “China Securities Regulatory Commission”) and its dispatched agencies shall supervise and manage the governance activities of listed companies and the conduct of related entities in accordance with law, and urge them to take effective measures to improve corporate governance where there are major problems with corporate governance. The Stock Exchange, the China Association of Listed Companies, and other self-regulatory organizations in the securities fund futures industry shall, in accordance with the provisions of this Code, formulate relevant self-regulatory rules to strengthen self-regulatory management of listed companies. The China Securities Regulatory Commission, its dispatched agencies and relevant self-regulatory organizations can evaluate the governance status of listed companies and promote their continuous improvement of corporate governance.

Chapter II Shareholders and Shareholders' Meetings

Section 1 Shareholders' Rights

Article 7. Shareholders shall have rights and obligations in accordance with laws and regulations and the articles of association of the company. Listed companies' articles of association, shareholders' meeting resolutions, or board resolutions shall comply with the law, and shareholders shall not be deprived or restricted of their legal rights.

Article 8. In the governance of listed companies, shareholders' rights shall be protected in accordance with law, and emphasis shall be placed on protecting the legitimate rights and interests of small and medium-sized shareholders.

Article 9. Listed companies shall establish unobstructed and effective communication channels with shareholders to guarantee shareholders' rights to know, participate in decision-making and supervision of the company's important matters.

Article 10. Listed companies shall actively give back to shareholders, clarify profit distribution methods, especially cash dividend policies, in the company articles of association, and maintain the consistency, rationality and stability of the cash dividend policy. Encourage listed companies to increase the frequency of cash dividends in line with profit distribution conditions. Listed companies shall disclose the formulation and implementation of cash dividend policies. Where conditions are met and no cash dividends are met, the reasons shall be fully disclosed.

Article 11 Shareholders have the right to protect their legal rights through civil litigation or other legal means in accordance with the provisions of laws and administrative regulations.

Section II Regulations for Shareholders' Meetings

Article 12. Listed companies shall stipulate procedures such as convening, holding and voting of shareholders' meetings in their articles of association. Listed companies shall establish rules of procedure for shareholders' meetings and include them in the articles of association or as annexes to the articles of association.

Article 13. The content of shareholders' meeting proposals shall comply with laws and regulations and the relevant provisions of the company's articles of association, fall within the scope of competence of the shareholders' meeting, and have clear topics and specific resolutions.

Article 14 A listed company shall stipulate in its articles of association the principle of authorization of the board of directors by the shareholders' meeting, and the details of the authorization shall be clear and specific. The shareholders' meeting shall not delegate to the board of directors the powers legally exercised by the shareholders' meeting.

Article 15. Shareholders' meetings shall set up a venue and be held in a combination of on-site meetings and online voting. The time and location of on-site meetings should be selected to facilitate shareholders' participation. Listed companies shall ensure that shareholders' meetings are legal and effective, and facilitate shareholders' participation in meetings. Shareholders' meetings shall allow reasonable time to discuss each proposal. Shareholders can vote by themselves or entrust others to vote according to law; both have the same legal effect.

Article 16 The board of directors of a listed company, independent directors, shareholders holding more than 1% of voting shares, or investor protection agencies established in accordance with laws, administrative regulations, or the provisions of the China Securities Regulatory Commission may publicly request the shareholders of the company to entrust them to attend shareholders' meetings on their behalf and exercise shareholders' rights such as the right to make proposals and vote on their behalf. Except as otherwise provided by laws and regulations, listed companies and shareholders' meeting convenors shall not set conditions on the solicitor. The collection of shareholders' rights shall be carried out free of charge, and the information necessary for shareholders to authorize and entrust shall be fully disclosed to the respondent. Shareholders' rights shall not be collected on a paid or disguised basis.

Article 17 The election of directors shall fully reflect the opinions of small and medium shareholders. Shareholders' meetings should actively implement a cumulative voting system in directors' elections. A shareholders' meeting of a listed company with a share ratio of 30% or more of the shares held by a single shareholder and its co-actors elects two or more non-independent directors, or where the shareholders' meeting of a listed company elects two or more independent directors, a cumulative voting system shall be adopted. Listed companies using a cumulative voting system shall stipulate implementation rules in their articles of association. Listed companies are encouraged to implement a cumulative voting system through differential voting.

Chapter III Directors and Board of Directors

Section 1. Election of Directors

Article 18 Listed companies shall stipulate standardized and transparent procedures for nominating and electing directors in their articles of association to ensure open, fair and impartial director selection.

Article 19. Listed companies shall disclose detailed information on director candidates before a shareholders' meeting is held, so that shareholders can fully understand the candidates. Director candidates shall make a written commitment before the notice and announcement of the shareholders' meeting, agree to accept the nomination, promise that publicly disclosed candidate information is true, accurate and complete, and ensure that they effectively perform their duties as directors after election.

Article 20 Under any of the following circumstances, you may not act as a director of a listed company: (1) a situation where you cannot act as a director or senior manager of a company as stipulated in Article 178 of the Company Law; (2) a securities market ban on being a director or senior manager of a listed company has not yet expired; (3) being publicly deemed unfit by the stock exchange to act as a director, senior manager, etc. of a listed company; (4) other circumstances stipulated in laws and regulations. The nomination committee of the board of directors of listed companies shall review whether the director candidates meet the qualifications for office. When disclosing director candidates, listed companies shall simultaneously disclose the review opinions of the Board of Directors Nomination Committee.

Article 21. A listed company shall sign a contract with the directors, clarifying the rights and obligations between the company and the directors, the directors' terms of office, the directors' responsibilities for violating laws, regulations and articles of association, compensation for early termination of the contract by the company for any reason, and the obligations and accountability of directors after leaving office.

Article 22. If a director occurs during his term of office, the circumstances set forth in Article 20 (1) shall immediately cease to perform his duties, and the board of directors shall immediately dismiss them in accordance with the regulations after becoming aware of or shall be aware of this fact. The nomination committee of the board of directors shall evaluate the qualifications of directors and promptly recommend dismissal to the board of directors if it finds that they are not eligible for office.

Section 2 Directors' Obligations

Article 23. Directors shall abide by laws and regulations and relevant provisions of the company's articles of association, perform their duties faithfully and diligently, and fulfill the promises they have made.

Article 24. Directors have a duty of loyalty to the company, shall take measures to avoid conflicts between their own interests and those of the company, shall not use their authority to obtain improper benefits, and shall not engage in acts which violate the duty of loyalty to the company as listed in Article 181 of the Company Law. Directors who use the convenience of their positions to obtain business opportunities belonging to the company for themselves or others, and operate businesses similar to the company they work for, shall report to the board of directors or shareholders' meeting, fully explain the reasons, measures to prevent conflicts between their own interests and the company's interests, and the impact on the listed company, etc., and disclose them. Listed companies are reviewed in accordance with the procedures stipulated in the company's articles of association.

Article 25. Directors have a duty of diligence to the company, and they shall perform their duties with reasonable care that managers normally should take in the best interests of the company. Directors shall ensure that they have sufficient time and energy to perform their due duties.

Article 26 If a director performs his duties in the company and causes damage to others, the company shall be liable for compensation; if the director has committed intentional or gross negligence, the company shall also be liable for compensation. Where directors perform their duties in the company in violation of laws and regulations or the provisions of the company's articles of association and cause losses to the company, they shall be liable for compensation, and the board of directors of the company shall take measures to investigate their legal liability.

Article 27. Directors shall attend board meetings and express clear opinions on matters discussed. If the directors themselves are unable to attend, they may entrust other directors in writing to vote on their behalf according to the client's wishes, and the client shall independently bear the legal responsibility. Independent directors may not appoint non-independent directors to vote on their behalf. When considering matters submitted to the board of directors for decision, they shall fully collect information and carefully judge whether the matters discussed involve their own interests, whether they fall within the scope of the board's competence, whether the materials are sufficient, and whether the voting procedure is legal.

Article 28. Directors shall be responsible for the decisions of the board of directors. If the resolution of the board of directors violates laws and regulations or the company's articles of association or shareholders' meeting resolution, causing a listed company to suffer serious losses, the directors participating in the resolution shall be liable to the company. However, if it is proven that objections were raised during voting and recorded in the minutes of the meeting, the director may be exempted from liability.

Article 29 With the approval of the shareholders' meeting, a listed company may apply for liability insurance for the indemnity of the director due to the execution of company duties during the director's term of office.

Article 30 When a director leaves office, all work handover procedures shall be completed. Directors shall not be relieved or terminated as a result of their separation from their duties during their tenure of office. Commitments that have not been fulfilled at the time of the director's departure should still be fulfilled. Listed companies shall examine whether the departing directors have unfulfilled obligations, unfulfilled promises, and whether they are suspected of breaking the law or regulations.

Section III Composition and Duties of the Board of Directors

Article 31 The number and composition of the board of directors shall meet the requirements of laws and regulations, and the professional structure shall be reasonable. Board members shall possess the knowledge, skills, and qualities necessary to perform their duties. Encourage diversity among board members.

Article 32. The board of directors shall perform its duties in accordance with law, ensure that listed companies abide by laws and regulations and the provisions of the company's articles of association, treat all shareholders fairly, strengthen communication with investors, and pay attention to the legitimate rights and interests of other stakeholders.

Article 33 A listed company shall guarantee that the board of directors shall exercise its powers in accordance with laws and regulations and the provisions of the company's articles of association, and provide the necessary conditions for the directors to perform their duties normally.

Article 34 A listed company shall establish a board secretary who is responsible for the preparation of the company's shareholders' meetings and board meetings, the storage of documents, the management of the company's shareholders' data, and handling matters such as information disclosure matters and investor relations work. As a senior manager of a listed company, the secretary of the board of directors has the right to attend relevant meetings, check relevant documents, and understand the company's financial and operating conditions in order to perform duties. The board of directors and other senior management shall support the work of the board secretary. No organization or individual may interfere with the normal performance of duties by the secretary of the board of directors.

Section 4 Rules of Procedure for Board of Directors

Article 35. Listed companies shall formulate rules of procedure for the board of directors, submit them to the shareholders' meeting for approval, and include them in the company's articles of association or as annexes to the articles of association.

Article 36 The board of directors shall hold regular meetings and hold temporary meetings as needed. The topics for board meetings should be prepared in advance.

Article 37 Board meetings shall be conducted in strict accordance with the prescribed procedures. The board of directors shall notify all directors in advance and provide sufficient information in accordance with the specified time. If two or more independent directors believe that the information is incomplete, the evidence is insufficient, or the provision is not timely, they may submit a joint written request to the board of directors to postpone the holding of the meeting or defer consideration of the matter. The board of directors shall approve it, and the listed company shall promptly disclose the relevant circumstances.

Article 38 The minutes of board meetings shall be true, accurate and complete. The directors, board secretary, and recorder attending the meeting shall sign the minutes of the meeting. The minutes of the board of directors meetings shall be kept properly.

Article 39 Where the board of directors authorizes the chairman to exercise some of the powers of the board of directors when the board of directors is not in session, the listed company shall clearly stipulate the principles and details of the authorization in the company's articles of association. Important matters of listed companies shall be decided collectively by the board of directors, and legal powers exercised by the board of directors shall not be delegated to the chairman, general manager, etc.

Section 5 Independent Directors

Article 40 Listed companies shall establish an independent director system in accordance with relevant regulations. Independent directors shall not hold positions other than directors in listed companies.

Article 41. The conditions of employment, election and replacement procedures, etc. of independent directors shall comply with relevant regulations. Independent directors must not have a direct or indirect interest in the listed company they are employed by, their main shareholders or actual controllers, or any other relationship that may affect their independent and objective judgments.

Article 42. Independent directors shall enjoy the general powers of directors, and shall also have special powers on relevant matters in accordance with laws and regulations and the articles of association of the company. Independent directors shall perform their duties independently and shall not be influenced by the listed company, its main shareholders, actual controllers, or other organizations or individuals having an interest in the listed company. Listed companies shall ensure that independent directors perform their duties in accordance with law.

Article 43. Independent directors shall perform their duties as directors in accordance with law, fully understand the company's operations and the content of board meetings, play a role in participating in decision-making, supervision and balance, and professional consulting within the board of directors, safeguard the interests of listed companies and all shareholders, and protect the legitimate rights and interests of small and medium-sized shareholders. Independent directors shall submit an annual debriefing report to the annual shareholders' meeting of listed companies to explain their performance of duties. Where conflicts occur between shareholders or directors of a listed company and have a significant impact on the operation and management of the company, independent directors shall take the initiative to perform their duties and safeguard the overall interests of the listed company.

Section 6 Special Committee of the Board of Directors

Article 44 The board of directors of a listed company shall establish an audit committee, and may establish special committees relating to strategy, nomination, remuneration and assessment as required. The special committee performs its duties in accordance with the company's articles of association and the authority of the board of directors. The members of the special committee are all directors, of which three or more members of the audit committee shall be directors who do not serve as senior management personnel in the company. Staff representatives who are members of the board of directors can be members of the audit committee. Independent directors of the Audit Committee, Nomination Committee, and Remuneration and Assessment Committee shall have a majority and act as convenor. The convener of the Audit Committee shall be an accounting professional. Where the relevant competent department under the State Council stipulates otherwise on the convenor of a special committee, it shall follow its regulations.

Article 45 The main duties of an audit committee include: (1) supervising and evaluating external audit work and proposing the hiring or replacement of an external auditor; (2) supervising and evaluating internal audit work, responsible for coordination between internal audit and external audit; (3) reviewing the company's financial information and disclosure; (4) supervising and evaluating the company's internal control; (5) exercising the powers of the board of supervisors as stipulated in the Company Law; and (6) being responsible for other matters authorized by the board of directors.

Article 46 The main responsibility of the Strategy Committee is to study and make suggestions on the company's long-term development strategies and major investment decisions.

Article 47 The Nomination Committee shall be responsible for formulating the selection criteria and procedures for directors and senior management, taking fully into account factors such as the composition and professional structure of the board of directors. The Nomination Committee selects and reviews candidates for directors and senior management personnel and their qualifications, and makes recommendations to the board of directors on the following matters: (1) nominating or dismissing directors; (2) appointing or dismissing senior managers; and (3) other matters stipulated in laws, regulations and articles of association. If the board of directors does not adopt or does not fully adopt the recommendations of the nomination committee, it shall record the opinions of the nomination committee and the specific reasons for not adopting them in the board resolution and disclose them.

Article 48 The Remuneration and Assessment Committee shall be responsible for formulating and evaluating assessment standards for directors and senior managers, formulating and reviewing remuneration policies and plans for directors and senior managers, and making suggestions to the board of directors on the following matters: (1) remuneration of directors and senior managers; (2) formulating or altering equity incentive plans and employee shareholding plans to motivate the accomplishments of authorized benefits and conditions for exercising rights; (3) directors and senior management personnel arrange shareholding plans in the subsidiary to which they intend to split; (4) other matters stipulated in laws and regulations and company articles of association. If the board of directors does not adopt or does not fully adopt the recommendations of the Remuneration and Assessment Committee, it shall record the opinions of the Remuneration and Assessment Committee and the specific reasons for not adopting them in a resolution of the board of directors, and disclose them.

Article 49 Where a listed company has not established a nomination committee or a remuneration and assessment committee within the board of directors, a special meeting of independent directors shall perform the duties of the nomination committee and the remuneration and assessment committee as stipulated in these standards. Special committees may hire intermediaries to provide professional advice. The listed company shall bear the expenses relating to the performance of the duties of the special committee.

Chapter IV: Incentives and Restraint Mechanisms for Senior Executives and Companies

Section I Senior Executives

Article 50. The appointment of senior management personnel shall be carried out in strict accordance with the relevant laws and regulations and the company's articles of association. Controlling shareholders, actual controllers, and related parties of listed companies must not interfere with the normal selection and recruitment procedures for senior managers, and must not directly appoint and dismiss senior managers beyond the shareholders' meeting or board of directors. Encourage listed companies to adopt an open and transparent approach to selecting and hiring senior management personnel.

Article 51 A person shall not act as a senior manager of a listed company if the circumstances listed in Article 20 (1) exist. If a senior manager experiences the circumstances set out in Article 20 (1) during his term of office, he shall immediately cease performing his duties and resign; if a senior manager does not propose to resign, the board of directors shall immediately dismiss him in accordance with the regulations after becoming aware of or shall be aware of this fact. The nomination committee of the board of directors shall evaluate the qualifications of senior managers and promptly recommend dismissal to the board of directors if it finds that they are not eligible for office.

Article 52. A listed company shall sign an appointment contract with senior management, clarifying the rights and obligations of both parties, the responsibilities of senior management for violating laws and regulations and the company's articles of association, and the obligations and accountability and recovery after leaving office.

Article 53 A listed company shall specify the responsibilities of senior management in the company's articles of association or other company systems. Senior managers shall abide by laws and regulations and the company's articles of association and perform their duties faithfully and diligently. The provisions of Articles 24, 25, 26, and 30 of these Standards apply to senior management of listed companies.

Section II Performance and Performance Evaluation

Article 54. Listed companies shall establish fair and transparent standards and procedures for evaluating the performance and performance of directors and senior managers.

Article 55 Performance evaluations of directors and senior managers shall be organized by the Remuneration and Evaluation Committee set up under the board of directors, and listed companies may entrust a third party to carry out performance evaluations. Independent directors' performance evaluations are carried out by means of self-evaluation, mutual evaluation, etc.

Article 56 The board of directors shall report to the shareholders' meeting on the performance of duties, performance evaluation results and remuneration, and the listed company shall disclose them.

Section 3 Remuneration and Incentives

Article 57. Listed companies shall establish a remuneration management system, including a mechanism for determining total wages, remuneration structures for directors and senior managers, performance evaluation, payment of remuneration, and suspension of payment claims. The remuneration of directors and senior managers of listed companies consists of basic remuneration, performance pay, and medium- to long-term incentive income. In principle, performance pay accounts for no less than 50% of basic remuneration and total performance remuneration. The remuneration of directors and senior managers of listed companies should be adapted to market development, match the company's operating performance and personal performance, and be in harmony with the company's sustainable development.

Article 58 Listed companies shall take into account factors such as industry level, development strategy, and job value to reasonably determine the remuneration distribution ratio for directors, senior managers, and ordinary employees, promote the preferential distribution of remuneration towards key positions, production lines, and high-level and highly skilled talents that are in short supply, and promote an increase in the level of remuneration for ordinary employees.

Article 59 Where a listed company changes from profit to loss or increased losses compared to the previous fiscal year, and the average performance pay of directors or senior managers has not decreased accordingly, the reason shall be disclosed. Listed companies with obvious cyclical characteristics of the industry can link the average performance pay of directors and senior managers to the performance cycle, but they should explain the cyclical characteristics of the industry they belong to and clarify the performance cycle. If the performance cycle exceeds three years, the basis for determination shall be explained. An R&D listed company that lost money at the time of listing can implement a special remuneration determination mechanism for directors, senior managers, or directors and senior managers who are “highly skilled” leading scientific and technological talents and other top scarce technical talents at home and abroad, before achieving profits, and is not linked to the company's operating performance.

Article 60 Remuneration plans for directors and senior managers of listed companies shall be formulated by the Remuneration and Assessment Committee of the Board of Directors, clarifying the basis and specific composition of remuneration determination. The director's remuneration plan is decided by the shareholders' meeting and disclosed. When the board of directors or the remuneration and assessment committee evaluate individual directors or discuss their remuneration, the director shall avoid it. The senior management remuneration plan is approved by the board of directors, explained to the shareholders' meeting, and fully disclosed. A loss-making listed company shall specify whether changes in the remuneration of directors and senior management meet the performance linkage requirements at every stage of the review of the remuneration of directors and senior managers. When carrying out internal control audits, accounting firms should focus on the effectiveness of performance evaluation control and whether the payment of remuneration complies with internal control requirements.

Article 61 The determination and payment of performance remuneration and medium- to long-term incentive income for directors and senior managers of listed companies shall be based on performance evaluation as an important basis. Listed companies shall determine that a certain percentage of performance remuneration for directors and senior management shall be paid after disclosure of annual reports and performance evaluations, and performance evaluations shall be carried out on the basis of audited financial data.

Article 62 encourages listed companies to establish deferred payment mechanisms for performance remuneration for directors and senior managers, taking into account factors such as industry characteristics and business models, and to clearly implement the specific circumstances, relevant personnel, deferred ratios and implementation arrangements applicable to deferred payments.

Article 63 When a listed company retrospectively restates a financial report due to misreporting such as financial fraud, it shall promptly re-evaluate the performance pay and medium- to long-term incentive income of directors and senior managers and recover the excess amount paid accordingly. If directors or senior managers of a listed company violate their obligations and cause losses to the listed company, or are at fault for illegal acts such as financial fraud, use of funds, or illegal guarantees, etc., the listed company shall reduce and stop paying unpaid performance remuneration and medium- to long-term incentive income according to the seriousness of the circumstances, and recover all or part of the performance pay and medium- to long-term incentive income already paid during the period in which the relevant act occurred.

Article 64. The content of compensation for early dismissal of directors and senior managers in the articles of association of listed companies or related contracts shall comply with the principle of fairness, shall not harm the legitimate rights and interests of listed companies, and shall not be transferred.

Article 65 Listed companies may implement incentive mechanisms such as equity incentives and employee shareholding in accordance with relevant laws and regulations and articles of association. The incentive mechanism for listed companies should be conducive to enhancing the company's ability to innovate and develop, promote the sustainable development of listed companies, and must not harm the legitimate rights and interests of listed companies and shareholders.

Chapter V Controlling Shareholders, Affiliates, and Listed Companies

Section 1 Code of Conduct for Controlling Shareholders and Related Parties

Article 66 Controlling shareholders shall exercise shareholders' rights and fulfill shareholders' obligations in accordance with law on the listed company they control. Controlling shareholders and actual controllers shall not use their control to damage the legitimate rights and interests of listed companies and other shareholders, and shall not use their position of control over listed companies to obtain illegal benefits. Where the controlling shareholder or actual controller of a listed company instructs a director or senior manager to engage in acts that harm the interests of the listed company or shareholders, the director or senior management shall be jointly and severally liable. The controlling shareholder or actual controller of a listed company who does not act as a director of the company but actually carries out the company's affairs, has a duty of loyalty and diligence to the company.

Article 67 Where controlling shareholders nominate candidates for directors of listed companies, they shall abide by the conditions and procedures stipulated in laws and regulations and the company's articles of association. Controlling shareholders shall not establish approval procedures for shareholders' meeting personnel election results and board personnel appointment decisions.

Article 68. Major decisions of listed companies shall be made by the shareholders' meeting and board of directors in accordance with law. Controlling shareholders, actual controllers, and related parties shall not violate laws, regulations and articles of association to interfere with the normal decision-making procedures of listed companies and damage the legitimate rights and interests of listed companies and other shareholders.

Article 69. Undertakings made by controlling shareholders, actual controllers, and all parties involved in a listed company shall be clear, specific, and enforceable, and commitments shall not be judged on matters that are clearly impossible to achieve based on the circumstances at the time. The committing party shall make a statement of implementation of the commitment, clarify the responsibility for breaking the promise, and earnestly fulfill the promise.

Article 70 Where there is a change in the control of a listed company, all parties concerned shall take effective measures to maintain the stable operation of the listed company during the transition period. If a major problem occurs, the listed company shall report it to the China Securities Regulatory Commission, its dispatched agencies, and the stock exchange.

Section II Independence of Listed Companies

Article 71 The controlling shareholder, actual controller, and the listed company shall separate personnel, assets, and finance, be independent in institutions and operations, and bear responsibility and risk independently.

Article 72. Listed company personnel shall be independent of controlling shareholders. Senior managers of listed companies shall not hold administrative positions other than directors and supervisors as controlling shareholders. Controlling shareholders and senior managers who also serve as directors of listed companies shall ensure that they have sufficient time and energy to undertake the work of the listed company. Where the controlling shareholder and actual controller simultaneously serve as the chairman and general manager of a listed company, the listed company shall reasonably determine the powers of the board of directors and general manager, explain the rationality of the arrangement and measures to maintain the independence of the listed company.

Article 73. The assets invested by the controlling shareholder in a listed company shall be independent, complete, and have clear ownership. Controlling shareholders, actual controllers, and related parties shall not occupy or dispose of the assets of listed companies.

Article 74 Listed companies shall establish and improve financial and accounting management systems in accordance with laws and regulations and articles of association, and adhere to independent accounting. Controlling shareholders, actual controllers, and related parties shall respect the financial independence of the listed company and shall not interfere with the financial or accounting activities of the listed company.

Article 75 The board of directors and other internal bodies of listed companies shall operate independently. There is no hierarchical relationship between the controlling shareholder, actual controller, and its internal organization and the listed company and its internal organization. Controlling shareholders, actual controllers, and related parties shall not interfere with the specific operations of listed companies in violation of laws, regulations, articles of association, and prescribed procedures, and must not affect the independence of their operations and management.

Article 76 The business of a listed company shall be independent of the controlling shareholders and actual controllers. Where the controlling shareholder, actual controller, and other units under their control are engaged in the same or similar business as the listed company, they shall promptly disclose relevant business conditions, influence on the listed company, measures to prevent conflicts of interest, etc., but shall not engage in the same or similar business which may have a significant adverse effect on the listed company.

Section III Related Transactions

Article 77. Transactions related to listed companies shall strictly carry out decision-making procedures and information disclosure obligations in accordance with relevant regulations.

Article 78. Listed companies shall sign written agreements with related parties on related transactions. The signing of an agreement shall follow the principles of equality, voluntarism, equal value and payment, and the content of the agreement shall be clear, specific, and enforceable.

Article 79. Listed companies shall take effective measures to prevent related parties from interfering with the company's operations by monopolizing procurement or sales channels to the detriment of the company's interests. Related transactions shall have commercial substance, and prices shall be fair. In principle, they shall not deviate from the prices or fees of independent third parties in the market. The board of directors shall accurately and comprehensively identify related parties and related transactions of listed companies, focus on reviewing the necessity, fairness and compliance of related transactions, and strictly implement the evasion of voting system for related transactions.

Article 80 Listed companies and their related parties shall not use related transactions to transfer profits or regulate profits, and shall not conceal related relationships in any way.

Chapter 6 Institutional Investors and Other Relevant Institutions

Article 81 encourages institutional investors such as social security funds, corporate pensions, insurance funds, and other investors supervised by the national financial supervision and administration agency in accordance with law to participate reasonably in corporate governance by exercising relevant shareholders' rights such as voting rights, question rights, and suggestion rights in accordance with law.

Article 82. In accordance with laws and regulations and articles of association, institutional investors play an active role in the governance of listed companies by participating in decision-making on important matters, recommending director candidates, and supervising the performance of directors' duties.

Article 83: Institutional investors are encouraged to disclose their goals and principles for participating in the governance of listed companies, strategies for exercising voting rights, and the circumstances and effects of exercising shareholders' rights.

Article 84. Intermediaries such as securities companies, law firms, and accounting firms shall actively pay attention to the governance status of listed companies and promote the formation of good corporate governance practices when providing professional services such as sponsorship, underwriting, financial advisory, law, and audit to listed companies. Listed companies should carefully select intermediaries to provide services to them, and pay attention to understanding the honesty, trustworthiness, diligence and diligence of intermediaries.

Article 85. Small and medium-sized investor protection agencies shall play an active role in the governance of listed companies and protect the legitimate rights and interests of small and medium-sized investors through multiple channels through shareholding and exercising rights.

Chapter 7 Stakeholders, Environmental Protection, and Social Responsibility

Article 86 Listed companies shall respect the legal rights of banks and other stakeholders such as creditors, employees, customers, suppliers, communities, etc., and carry out effective exchanges and cooperation with stakeholders to jointly promote the sustainable and healthy development of the company.

Article 87. Listed companies shall provide necessary conditions to protect the rights and interests of stakeholders. When their legitimate rights and interests are infringed upon, stakeholders shall have the opportunity and means to obtain redress in accordance with law.

Article 88 Listed companies shall strengthen the protection of employees' rights and interests and support workers' congresses and trade union organizations to exercise their powers in accordance with law. The board of directors and management shall establish diverse communication channels with employees to listen to employees' opinions on the company's operations, financial situation, and important matters involving employees' interests.

Article 89 Listed companies shall actively implement the concept of green development, integrate ecological environment protection requirements into development strategies and corporate governance processes, actively participate in the construction of ecological civilization, and play an exemplary leading role in pollution prevention and control, conservation and intensity, green and low carbon.

Article 90 While maintaining the continuous development of the company, improving business performance, and safeguarding the interests of shareholders, listed companies shall actively fulfill their social responsibilities in areas such as community welfare, disaster relief and poverty relief, public welfare undertakings, and rural revitalization.

Chapter 8 Information Disclosure and Transparency

Article 91. Listed companies shall establish and implement a management system for information disclosure matters. Listed companies and other information disclosure obligors shall disclose information truthfully, accurately, completely, in a timely and fair manner in strict accordance with laws and regulations, self-regulatory rules, and articles of association, and must not include false records, misleading statements, major omissions, or other improper disclosure. Information disclosure matters involving state secrets or trade secrets shall be handled in accordance with relevant regulations.

Article 92 Directors and senior management personnel shall ensure the truthfulness, accuracy, completeness, timeliness and fairness of the information disclosed by the listed company. Listed companies shall establish codes of conduct regulating the disclosure of information by directors and senior management, and clarify situations where it is prohibited to publish information to the outside world without the permission of the board of directors.

Article 93 Shareholders, actual controllers, acquirers, counterparties, etc. who hold a specified proportion of shares shall disclose information in accordance with relevant regulations, cooperate with the listed company's information disclosure work, promptly inform the listed company of important matters such as changes in control rights, changes in rights, relationships with other units and individuals and changes, respond to inquiries from listed companies, and ensure that the information provided is true, accurate and complete.

Article 94. Information disclosure obligors shall abide by the principle of fairness, maintain the continuity and consistency of information disclosure, must not make selective disclosure, must not conflict with information disclosed in accordance with law, must not mislead investors, use voluntary information disclosure to engage in market manipulation, insider trading, or other illegal and illegal acts, and must not violate public order and morals or harm the public interest of society. Where information of a certain predictive nature is voluntarily disclosed, the basis for prediction should be clarified and possible uncertainties and risks should be indicated.

Article 95: Information disclosed by an obligor to disclose information shall be simple, clear, and easy to understand. Listed companies shall ensure that users can obtain information in an economical and convenient manner.

Article 96. The chairman of the board shall bear primary responsibility for the management of information disclosure matters of listed companies. The Secretary of the Board of Directors is responsible for organizing and coordinating company information disclosure matters, and handling related matters such as public disclosure of listed company information.

Article 97 A listed company shall establish an internal control and risk management system, and establish an internal audit agency responsible for inspecting and supervising the company's important operations, the control of subsidiary companies, disclosure of financial information, and implementation of compliance with laws and regulations. Listed companies regularly disclose the construction and implementation of internal control systems in accordance with relevant regulations, as well as audit opinions of accounting firms on the effectiveness of internal control of listed companies.

Article 98 Listed companies publish sustainability reports in accordance with stock exchange regulations.

Article 99 Listed companies shall disclose information relating to corporate governance in accordance with relevant regulations, regularly analyze the state of corporate governance, formulate plans and measures to improve corporate governance, and earnestly implement them.

Chapter IX Supplementary Provisions

Article 100 Where the China Securities Regulatory Commission and other departments have special provisions on governance arrangements for relevant listed companies according to law, they shall abide by those regulations. Where pilot red-chip companies issue shares or depository certificates in China and go public, corporate governance shall be carried out in accordance with these standards, except for matters applying the laws and regulations of the place of registration abroad.

Article 101. These guidelines will come into effect on January 1, 2026.

This article was edited from: Securities Regulatory Commission's official website; Zhitong Finance Editor: Chen Xiaoyi.