Governance – Chinese Style

Many large Chinese businesses, especially those of deemed strategic importance to the Government and Chinese Communist Party, are required have a representative or representatives of the Chinese Communist Party working inside the organisation to ensure compliance with appropriate culture and social responsibility obligations.  Here is one exampleHere is anotherAnd yet one more.

In Australia, our intellectual leaders have followed these best practice examples through:

In the mean time, the US has cut taxes and undertake a serious business deregulation exercise and has just recorded an annualized 4.1% growth.

Oh yes.  Australia is heading in the right direction.

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28 Responses to Governance – Chinese Style

  1. Snoopy

    I don’t know why ASIC is pussy footing around. If they wants GetUp! goons embedded in the management of public and private companies they should just do it.

  2. H B Bear

    The ASX Corporate Governance Council has proposed that ASX listed companies demonstrate and maintain their “social licence to operate”

    I read Janet Albrechtsen’s article in Teh Weekend Australian on this. Simply mind boggling. And frightening.

  3. .

    The Commonwealth Government has empowered and funded ASIC to embed ASIC officers inside private companies to ensure that they behave and comply with government policies.

    They should really go to town on this, re: vetting and contractual conditions. Anyone who does this gets blacklisted by the industry. No consulting later on, no AFSL later on, total shunning. Refuse service as well. Nominate them as a potential organised crime figure. Don’t even let them have a bank account. Make them sign a stat. dec. that they’re not government spies. Make them Federal offenders!

    Always escalate.

    all banks should appoint a Principal Integrity Officer (PIO) obliged by law to report directly to their board on the alignment of any payments made by the institution with the new customer best interest duty.

    Ain’t they called “general counsel”?

    The ASX Corporate Governance Council has proposed that ASX listed companies demonstrate and maintain their “social licence to operate”.

    Glass houses. There are ferals up Lismore way that would eat alive anyone involved with the ASX (but they do like the dividends that pay their BMW lease).

  4. MPH

    The right direction or the left direction?

  5. Makka

    Incidentally, this is also exactly how the Russian Mafia works.

    “Mr Andresovitch, say hello to your new accountant, Mr Yuri. He is here to help with compliance”.

  6. vr

    Some of the stuff like where firms have to report on director skills is borrowed from the US. Early results does not support diversity in skill sets.

  7. Bruce of Newcastle

    The Commonwealth Productivity Commission has recommended that all banks should appoint a Principal Integrity Officer (PIO)

    Are you sure they aren’t called Principal Integrity Governors?
    No trough is too small for government to get its snout into.

  8. stackja

    Once men, yes, few if any women, left school went to the local bank, got a job as teller, worked hard, got promoted, all the time, been honest, as taught in home and school. Then came the 1960s. Today voters demand government enforce honesty.

  9. Geoff

    Is this like how Soviet submarines had “Political Commisars” on board to make sure everyone behaved?

  10. At the very least companies should make it clear to the ASX that there is no such thing as a ‘social license’.

  11. Speedbox

    Is this like how Soviet submarines had “Political Commisars” on board to make sure everyone behaved?

    Yes, but not just submarines. In the old days a political ‘adviser’ was embedded in virtually every major organisation whether civil or military. Coupled with that, at face value, you couldn’t entirely trust your neighbor, the local shopkeeper or school teacher as they may inform on your lack of commitment to the communist ideal. Only after knowing these people for some time (potentially years) could you dare to speak freely, but quietly.

    Anyway, regardless of that, I see the words ‘social licence’ raised again. WTF is this social licence crap? I thought we operated under the rule of law. If the laws are inadequate, change them. Enforce those laws via random audit. How do you demonstrate a ‘thing’ that is, at best, poorly defined and subject to interpretation by politicians and/or their Departments and/or assorted vested interests. If its not the law, why does any organisation has a responsibility to comply? Because its ‘the vibe of the thing’. F*ck off.

  12. Makka

    Only after knowing these people for some time (potentially years) could you dare to speak freely, but quietly.

    Speedy, members of families were not open or honest with each other through fear of being informed upon. Secrecy and silence were a national trait you can see echoes of even today decades after the USSR collapsed. It altered personalities nationally I suspect.

  13. Dear Speedbox

    WTF is this social licence crap?

    WTF you ask?

    Here are the words of our trust and wise Prime Minister, the Hon. Malcolm Turnbull MP:

    The singular pursuit of an extra dollar of profit at the expense of those values is not simply wrong but places at risk the whole social licence, the good name and reputation upon which great institutions depend

  14. .

    You mean former merchant banker Malcolm Turnbull said that crap?

    The dude is total douche. No more kind words. At all.

  15. Speedbox

    In the mean time, the US has cut taxes and undertake a serious business deregulation exercise and has just recorded an annualized 4.1% growth.

    Well we’re too smart to fall for that. We know how to encourage business – by increasing regulations, costs and promising tax relief in 7 years (if passed by the Parliament).

    The Commonwealth Government has empowered and funded ASIC to embed ASIC officers inside private companies to ensure that they behave and comply with government policies.

    Private companies? So, bypass the COO, CFO and CEO and go directly to the Board. Yeah, that’ll go down well.

    Seriously, this place is like a rancid squat toilet at Ajit’s Indian Restaurant after all-you-can-eat vindaloo night.

  16. Mak Siccar

    Surely they should be known as Principal Principle Integrity Officers.

  17. H B Bear

    So what happens when the banks blow themselves up again down the track (and they will) and the ASIC guy is sitting in the office next to you?

  18. Mak Siccar

    Social licence.

    What Is the Social License?
    The Social License has been defined as existing when a project has the ongoing approval within the local community and other stakeholders, ongoing approval or broad social acceptance and, most frequently, as ongoing acceptance.

    I wonder if the CFMMEU is involved?

    There is ample evidence that a failure to gain and maintain this Social License can lead to conflict, delays or cost for the proponents of a project.

    These self-appointed guardians have their own website for heaven’s sake!

    https://socialicense.com/index.html

  19. Speedbox

    Westpac chief executive Brian Hartzer said he “fully” supported the Prime Minister’s remarks…..

    “I think culture in banks is very important. Banks do operate under a social licence, having a banking licence is a privilege and the community rightly expects a high standard of banks and bankers,” Mr Hartzer said.

    Thankyou Sparty. That is a weird-arse thing. I thought banks operated under the law but apparently, according to Westpac’s CEO, they operate under a social licence.

    In my simplistic view of the world, all enterprises operate under the prevailing law. If the law is wrong or needs fine tuning, then do so. If you want to enforce it, there are numerous methods including random audits. But I am in flustered awe of the timidity of Chief Executives who meekly bend over for the nonsense of a non-definable term such as a social licence. (on the other hand, perhaps I could start a business selling those licences. Does anyone know where I can buy them? Are they made in China? Are they traded on any specific exchange – you know, like those carbon credit certificates).

    Yesterday I lamented the future of this country and nothing I have seen or heard in the past 24 hours has improved my mood or appraisal.

  20. Mak Siccar

    Ohhhhh, there are consultants behind it, ready to make money, money, money!

    Do you want to know more about the Social License to Operate?

    For more information on gaining, maintaining and measuring the Social License to Operate,
    please contact:

    Ian Thomson: [email protected]
    On Common Ground Consultants Inc (www.oncommonground.ca)

    Or

    Robert Boutilier: [email protected]
    Robert Boutilier and Associates (www.stakeholder360.com)

  21. Tel

    social licence = socialist license.

    You get to ask the socialists for permission to operate a business (or anything).

    Incidentally, this is also exactly how the Russian Mafia works.

    Why am I not surprised?

  22. pbw

    The State Grid Corporation of China (Trustworthy, Sincere, Credible, Responsible) has an eleven-member executive, including Chief Compliance officer, Executive Board Member Mr. Huang Dean and Executive Board Member, Chairman of the Labor Union Mr. Liu Guangying. Those are the nominated ones.

    The report of the Bank of China makes interesting reading. There’s a strong emphasis on Belt and Road, and on the internationalisation of the RMB. Browsing the report, I came across this.

    Assisting Hungary to issue the first sovereign Panda bond
    In July 2017, BOC, as a co-lead underwriter and lead book runner, assisted Hungary to successfully issue RMB1 billion of bond (i.e. “Panda bond”) in China’s interbank bond market. This is the first time for Hungary to issue a RMB bond in China’s interbank bond market; also, it is the first sovereign Panda bond earmarked for the cooperation under the Belt and Road Initiative. The bond has been subscribed by overseas investors actively, with the subscription size amounting to RMB1.96 billion.

    There’s a lot of drivel about inclusiveness (% of female employees 57.05) and a lot of greenery (balance of green credits 539 billion RMB), but Chinese engineering has some pretty impressive achievements (and failures) to its credit, and they keep on building monster projects.

    There are plenty of horror stories about unsustainable credit practices, but the BoC report has a remarkable emphasis on the promotion of commercial activity across the scale from micro to monster. David Goldman (who has his own interests in Hong Kong) waxed lyrical about the strength of innovation in that part of the world, especially as compared with the US under then-president Obama.

    The Chinese mindset, to judge by appearances, is different. Does the increasing monopoly of power by Xi represent a threat or a boon to the continued increase of Chinese financial and, consequently, military power? Michael Ledeen described China as the world’s first mature Fascist state. Does Fascism have a future, and is it China?

  23. J.H.

    It seems that our Political class is getting ready to accept China as our future Regional Partner. An authoritarian state is just so much easier to administer than messy representative politics and democratic principles…. Though China probably wouldn’t use the term, Regional Partner. They’d probably lean toward “Vassal State” as being more in line with our future arrangements.

    I wouldn’t trust our political class or their bureaucrats any further than I could kick them.

  24. BorisG

    US has just recorded an annualized 4.1% growth.

    Obama had 5.5% in one of the quarters. https://tradingeconomics.com/united-states/gdp-growth

    The annual GDP growth in the US is 2.8%, not that different from Australia

  25. 2dogs

    recommendation requires directors to “articulate and disclose” the company’s core values

    The correct answer to this is that the company believes that it is not appropriate for a company to impose a set of values on its shareholders, employees, or customers.

    State that as its only core value, if it must.

  26. Eyrie

    “Yes, but not just submarines. In the old days a political ‘adviser’ was embedded in virtually every major organisation whether civil or military.”
    The ADF has lawyers doing the same thing.

  27. Bob in Castlemaine

    It’s axiomatic of course that the ACTU, CFMEU and the AWU will also have “government supervisory agents” embedded to oversee their activities?

  28. .

    BorisG
    #2783647, posted on August 8, 2018 at 2:48 am

    US has just recorded an annualized 4.1% growth.

    Obama had 5.5% in one of the quarters. https://tradingeconomics.com/united-states/gdp-growth

    The annual GDP growth in the US is 2.8%, not that different from Australia

    Get out of town Boris. Look at the participation rate under Obama. Hopeless!

    One quarter out of 32! His own analysts predicted he’d “cure” the recession rather quickly, ALAS:

    http://sbvor.blogspot.com/2010/06/obamas-epic-failure-public-vs-private.html

    http://sbvor.blogspot.com/2010/01/2009-epic-fail-of-year-jobs-jobs-jobs.html

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