The corporate governance standards of financial institutions have been further improved. The State Administration for Financial Regulation recently issued a notice on matters related to the connection between corporate governance supervision regulations and the Company Law (hereinafter referred to as the "Notice"), and publicly solicited opinions on the "Decision on Amending Some Regulations (Draft for Comments)" (hereinafter referred to as the "Decision"). It is reported that the newly revised Company Law was officially implemented on July 1st this year, which put forward new requirements for the establishment of the company's supervisory board, employee directors, and the management of related party transactions among directors, supervisors, and senior personnel. When asked by reporters, the responsible persons of relevant departments of the State Administration of Financial Regulation stated that in order to ensure the connection of regulatory systems, provide specific guidelines for financial institutions to improve their governance structure and carry out amendments to their articles of association, the State Administration of Financial Regulation has drafted and formed the "Notice" and "Decision". The Notice specifies that financial institutions may, in accordance with the company's articles of association, establish an audit committee composed of directors in the board of directors to exercise the powers of the supervisory board as stipulated by the Company Law and regulatory systems, without setting up a supervisory board or supervisors. Financial institutions can choose to retain the supervisory board to perform their duties based on their own actual situation, or have the audit committee perform the duties of the supervisory board. After the cancellation of the supervisory board by financial institutions, if the original external supervisors meet the qualifications for independent director positions, they may be transferred to independent directors according to the selection procedures for independent directors. The cumulative tenure of the original external supervisors and transferred independent directors shall not exceed six years in principle. Industry insiders indicate that overall, these revisions are beneficial in reducing the management costs of financial institutions and enhancing the flexibility and effectiveness of corporate governance. For financial institutions with more than 300 employees, except for those that have established a supervisory board in accordance with the law and have employee supervisors, their board of directors should include employee directors. The Notice specifies that employee directors shall be democratically elected by the company's employees through the employee representative assembly, employee assembly, or other forms. Senior management and supervisors shall not concurrently serve as employee directors to avoid conflicts of interest. The head of the relevant department of the State Administration of Financial Regulation stated that considering the need to fully solicit opinions from all parties and fulfill the relevant procedures for democratic management of enterprises when setting up employee directors, the State Administration of Financial Regulation will guide various institutions to carry out the relevant work such as amending the articles of association and selecting personnel in a safe and orderly manner based on the actual situation. The reporter learned that the current "Management Measures for Related Party Transactions of Banking and Insurance Institutions" (hereinafter referred to as the "Measures") divide related party transactions into two categories: general and significant related party transactions, and only require significant related party transactions to be approved by the board of directors. The newly revised Company Law further strengthens the fiduciary duty of directors, supervisors, and senior management personnel, requiring all related transactions to be submitted to the board of directors or shareholders' meeting for review. The Decision makes corresponding revisions to the Measures, requiring directors, supervisors, senior management personnel, and their affiliates to obtain approval from the board of directors for related transactions with banking and insurance institutions. At the same time, based on the actual situation of the industry, for daily financial products or services provided by financial institutions with small transaction amounts, the review process can be simplified. Specifically, for related transactions between natural persons with a single transaction amount of less than 500000 yuan or legal persons with a single transaction amount of less than 5 million yuan, and if the cumulative amount after the transaction does not meet the criteria for significant related transactions, the board of directors may make a unified resolution on the management of such transactions, exempting them from individual review. The relevant department heads of the State Administration for Financial Regulation stated that the "Notice" is an important measure to implement the Company Law, which is conducive to financial institutions establishing governance structures that are in line with their actual situation, reducing management costs, and enhancing the flexibility and effectiveness of governance; Beneficial for protecting the rights and interests of employees, strengthening democratic management of enterprises, and enhancing internal supervision and balance. Next, the State Administration for Financial Regulation will guide financial institutions to implement relevant requirements in a stable and orderly manner, continuously improve corporate governance, and provide strong support for high-quality financial development with more perfect internal governance. (New Society)