CHINA Law and Practice Contributed by: Kevin Wang, Global Law Office
functions and powers to replace the board of supervisors or supervisor. The audit committee of a joint stock company shall have at least three members. 4.2 Roles of Board Members The board of directors shall be presided over by a chair, and may have one or more vice-chairs. The chair shall be responsible for presiding over shareholder meetings, convening and presid - ing over meetings of the board of directors, and inspecting the implementation of resolutions of the board. A vice-chair assists the chair in their work. If the chair cannot or does not carry out their duties, such duties shall be carried out by the vice-chair; if the vice-chair cannot or does not carry out its duties, the duties shall be car - ried out by a director jointly elected by more than half of the directors. A publicly traded company shall have independ - ent directors and board secretaries. Independ - ent directors shall be responsible for supervis - ing the directors and officers, and shall report their work to the shareholder meeting annually. The board secretary shall be responsible for the preparation of shareholder meetings and meet - ings of the board of directors, custody of docu - ments, management of shareholders’ materials, disclosure of information, investor relations and other matters. 4.3 Board Composition Requirements/ Recommendations Qualifications of Directors Persons may not serve as a director of a com - pany in any of the following circumstances: • they are without civil capacity or have limited civil capacity; • they have been sentenced to criminal penal - ties for corruption, bribery, embezzlement or
misappropriation of property or for sabotag - ing the socialist market economy order, and less than five years has elapsed since the expiration of the period of execution, and less than two years has elapsed since the expira - tion of the probation period of suspended sentence; • they have been deprived of their political rights for committing a crime, and less than five years has elapsed since the expiration of the period of execution; • they have served as a director or manager of an enterprise that has been declared bank - rupt and they bear personal responsibility, and less than three years has elapsed since the date of completion of the bankruptcy liquidation; • they have served as the legal representative of an enterprise whose business licence has been revoked or has been ordered to close its business operations due to a violation of law and bear personal responsibility, and less than three years has elapsed since the date of the revocation of business licence or the date of the order of closing down; and • they have been listed by the people’s court as the persons subject to the enforcement for breach of trust obligations because they have a large amount of debt, which is due but has not been repaid. Special Requirements for Chairman and Staff in Certain Industries There are special senior position segregation requirements in specific industries. For an exam - ple, the chairman of a bank or an insurance com - pany shall not concurrently serve as the CEO or the general manager for the institution. And members of commercial banks and state-owned companies may not take part-time jobs in other economic organisations.
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