From July 4th to 6th, 2019, the Zhongguancun Going Global Enterprise International cooperation and management senior training class (the first phase) was successfully held in the Chamber of China International Commerce. Pan Jian, Vice President of International Research Institute of China Research Think Tank, made a presentation on the theme of "Strengthening compliance Management, Escorting the Sustainable Development of Overseas Business Enterprises" for students there.
Chinese enterprises expand global markets incessantly as Going Global, and make great achievements for the past 40 years after "reform and opening". With Chinese enterprises further developing internationally, cases on compliance risks begin to surge. Currently, under the external environment of the western trade protectionism and unilateralism rise. How to identify, prevent and deal with compliance risk is urging problem to Chinese enterprises.
August of 2018, Xi Jinping on the conversation for 5 anniversary of promoting the belt and road construction, propose that Legal management, environmental protection, fulfil social responsibility are the image ambassador of the Belt and Road. Compliance management is the precondition for enterprise to go abroad stably in the long term, and as an important headstone for enterprise to improve international competitiveness. Enterprises perform the concept of high-quality development, strengthen the awareness of risk prevention. As to attach importance to corporate governance, improve the compliance management ability.
Pan first analyzed the necessity of compliance from the perspective of corporate governance and pointed out that the main adjustment of the traditional corporate governance structure is the mutual checks and balances between the general meetings of a shareholder, board of director, the board of supervisors and the management on the decision-making and operation of the company. However, to prevent legal risks and reduce corporate losses, the compliance mechanism is gradually being incorporated into the corporate governance structure in a modern company. Therefore, compliance management, business management and financial management are collectively referred to as the three pillars of corporate management.
Pan further expounds the content and definition of the compliance, pointed out the compliance is the foundation of the enterprise to fulfil the social responsibility. Corporate social responsibility refers to an enterprise creating profits, is responsible for shareholders, meanwhile are undertaking responsibilities for employees, society and environment. It includes abiding by business ethics, ensuring production safety, occupational health, protecting the lawful rights and interests of workers, saving resources, and protecting the environment, etc.
Therefore, enterprise compliance content includes:
(1) compliance with laws and regulations, laws, and regulations of the country where the company headquarter is in and the country where it operates,
(2) Comply with regulations, and the internal rules of the enterprise which contain the enterprise's code of business conduct,
(3) compliance with codes of conduct and ethics, etc. The three elements of compliance system construction include people, system, and process.
To help students and establish a knowledge map of legal system related to compliance, Mr Pan further sorted out the development course of international compliance and summarized the new trends and challenges of current global compliance development.
Regarding compliance policies and regulations issued by China in recent years, unscramble Guidelines on Compliance Management of Central Enterprises (trial) issued by State-owned Assets Supervision and Administration Commission on Nov. 2nd, 2018 and Guidelines on compliance Management of enterprises' overseas operations (Hereinafter referred to as the Guidelines) issued by National Development and Reform Commission, Ministry of Foreign Affairs, Ministry of Commerce, the People's Bank of China, State-owned Assets Supervision and Administration Commission, Foreign Exchange Bureau, All-China Federation of Industry and Commerce on Dec 20th, 2018. Mr Pan pointed out that Chinese enterprises do not have a strong awareness of going abroad compliance operation, and their compliance management ability needs to be improved in the process of going abroad. It is necessary to further standardize its production and operation activities under the guidance of international commercial law and new guidance, strengthen the design of compliance management process in foreign trade, overseas investment, overseas contracted projects, overseas daily operation and other activities, fully identify compliance requirements, and ensure the full compliance of the whole operation process.
Pan especially emphasized that the general exists the problem of compliance operation during the development of private enterprises. The latest compliance guidelines issued by the state are also applicable to the implementation and reference by private enterprises. By improving the compliance management level of private enterprises to make private enterprises play a greater role in "the Belt and Road".
In terms of corporate compliance system and specific practices management, teacher Pan shares compliance work experience and practice in the world top 500 companies, provides a series of specific practical case and measures, to further help students how to refer guide requirements on enterprise landing compliance systems construction, management process and cultural training, etc. The paper also analyzes the country risks encountered in the overseas operation of enterprises and corresponding strategies with practical cases.
After more than three hours of courses, the students all said that Mr Pan's compliance course was excellent and was full of knowledge in theory, policy, practical operation. It not only targets at the unsatisfied points of current enterprises compliance but also has the height of international practical operation. They are looking forward to more in-depth compliance courses.