Sample Paper: “International Cooperate Governance”

The China Mobile group has an audit committee that makes re-appointment and elimination of outside assessors. They monitor integrity of financial matters of the company and monitor the independence of external auditors. Their roles and functions are clearly defined to ensure that they perform their duties independently from other departments. There are external auditors in the company and currently the external auditors are KPMG. They have been assigned the task of making sure that integrity is monitored in the finance statements. The committee oversees the external auditors work diligently for their specified period of time and makes sure there is no breach of contract. The current external auditor’s contract comes to an end at this financial years and it will not be extended. They compliance with the regulators and make sure the stipulated rules are followed to the latter.


The company is accountable towards the society and environment. They are embracing the green action plan to ensure that they utilize mature technologies while developing new energy saving applications with the existing management. They are giving back to the society. Some of the things they have been doing include training 48000 primary and secondary teachers, built 1694 libraries and 674 Multimedia classroom to improve the level and quality of education. Through their China warm 12.1 project, they have provided livelihood and education assistance to thousands of children who lost their parent due to AIDS and extreme poverty. They have the village connect project where they helped a total of 110,000 remote villages to establish basic communication facilities. They disclose this in their Annual report on what they have done. The information is readily available to the general public and all stakeholders.
There is no monetary, company, family or other material associations between members of the board. These individuals have been assigned their post due to the level of education and experience they are adding to the firm. They are recommended to the board after going through the normal procedures of application in their respective post. All directors are supposed to retire by regular change and re-election at the Annual General Meeting every three years. During AGM all stakeholders decide whether the directors will continue to offer their services to the company after three years in office. They are the people who make the decision.

The Chief Executive officer is the chairperson of the board. He does not have excessive power because there are other board members who also are part and parcel of decision making. Their roles and function are clearly defined in the company. They work as a unit.
There are three committees that compose members who are solely independent and non-executive directors. These committees include audit, remuneration and the nomination committee. The audit committee ensures and monitors the integrity of the finances in the company. They also re-appoint or remove the external auditors. The remuneration committee makes recommendation after a thorough analysis to the panel on the payment approach of all employees and directors.Nomination committee is involved in the reviewing of the arrangement, extent and inclusion of the board. The re-election of BOP is after three years in the AGM meetings.
The company has been growing stably since its start. The financial year given show an improvement in all areas that are compared to the past years. The beneficial feature to equity shareholders margin was 23.1 percent. The RMB was at 6.43. It had maintained its market leading positions and profitability despite cut-throat competition. EPS current performance was at 6.43 depicting an increase contrasted to the past years.
Remuneration is taken care of by the remuneration committee. It makes suggestion to the board on the payment packages of individuals and senior management. They review and approve management remuneration proposal with reference to corporate goals. The Remuneration Board is accountable for influencing the remuneration packages of all senior management. They ensure that no director decides their own remuneration and award themselves illegally. Currently, their cash portion of their senior management’s remuneration comprises of a permanent monthly wages and a performance-linked yearly bonus. The award and bonuses of the performance-linked yearly bonus is connected to the accomplishment of significant performance indicators or objectives.

The organization is required to stick to certain business values and principles while performing management functions. China Mobile in the year 2004, adopted a system of ethics, which is appropriate to the employees from the CEO all the way to the others directors. They ensure that honest and ethical conducts are followed and employees can deter from all the wrong doings.
Risk is disclosed in the annual report. China Mobile is currently positioned favorably to manage risks and achieve sustainable development. The report is shared with the members so that they can be informed. The group has embraced strategic information and achieved progress in three areas. They are doing this to be able to compete in this competitive business. There are effective methods of evaluating risk by having a team that is ready to evaluate risk. They are better positioned to manage risk in the organization.
Annual General meeting is held once a year in May where stakeholders are given a chance to ask questions on whatever issues they have. This is where members interact and share and clarify issues. Stakeholders are given the right to act by written statement. They can get whatever information they require at any time. They are aware of their rights and they are always included in the report. There is effective communication through their annual and interim reports, investment analyst conferences, and telephone conferences to explain relevant issues. They can access current information on the website anytime. They have voting rights and they can propose a person other than retiring director.

 

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