6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.
Pursuant to the Company Law of China, CIC sets up its Board of Directors, Board of Supervisors and Executive Committee as three governing bodies, with well-defined responsibilities and effective checks and balances among the three.
CIC’s Board of Directors is authorised to oversee the company’s operations, evaluate its overall performance and make decisions on important matters in accord with its Articles of Association. Based on objectives and principles set by the State Council, the Board reviews and approves CIC’s development strategies, operational guidelines and investment plans. It also decides on the implementation of corporate strategies, identifies major issues to report to the shareholder, appoints and removes senior executives and decides on or authorises the establishment of management bodies as necessary.
The Board of Supervisors is responsible for monitoring the performance of directors and executives in the execution of their duties as well as the effectiveness of supervisory procedures within CIC. Also in charge of the Department of Internal Audits, the Board of Supervisors selects external auditors and monitors CIC’s accounting and financial functions.
Entrusted by the Board of Directors, CIC’s Executive Committee translates Board of Directors’ guidance into detailed strategies and oversees CIC’s day-to-day operations. It has the authority to make required operating decisions, including those for basic rules, institutional adjustment, operating mechanisms, performance evaluation and remuneration.