The Ministry of Finance ("MOF") has recently issued the Operating Guidelines for the Deliberation of Proposals by State-owned Equity Directors of Financial Institutions (the "Guidelines"), immediately effective from the date of issuance.
The Guidelines provide clarity on duties and authority in respect of the deliberation of proposals for State-owned equity directors of financial institutions, procedures for deliberating proposals, the reporting system, etc., stating that equity directors shall legally perform their six duties concerning the deliberation of proposals, including "the duty to voice their professional opinions independently and objectively in the board of directors and other special boards, within their voting authority over proposals as granted under these Guidelines and in line with articles of association and relevant rules of procedure adopted by the financial institutions where they serve". In addition, the Guidelines state that, equity directors' voting authority over proposals differs in two circumstances. In case of proposals for material events, they shall voice their opinions and vote in strict accordance with voting instructions and requirements from entities that dispatch them to the concerned financial institutions. However, if the proposals are made for general affairs, they may vote at their own discretion, and the entities dispatching them to the concerned financial institutions may give equity directors risk warnings when they consider it necessary. Furthermore, the Guidelines emphasize that, equity directors will be treated and held accountable pursuant to relevant provisions, if they fail to perform their duties correctly in line with relevant provisions of the said dispatching entities and the articles of association of the financial institutions where they serve, during their duty performance.