Core Viewpoint - The China Securities Regulatory Commission (CSRC) has revised the Corporate Governance Code, which will take effect on January 1, 2026, aiming to enhance the governance of listed companies and protect the interests of minority shareholders [1]. Summary by Key Areas Improvement of Board and Executive Supervision - The new regulations establish comprehensive guidelines for the appointment, performance, and departure of directors and executives, emphasizing the need for strict qualification reviews and enhanced disclosure of conflicts of interest [1]. - Companies are required to arrange for accountability measures for executives upon their departure, ensuring a review of their duties during their tenure [1]. Establishment of Incentive and Restraint Mechanisms - Listed companies must create a compensation management system that aligns executive pay with company performance and individual contributions, promoting a balance between incentives and constraints [2]. - The regulations encourage deferred compensation and clawback mechanisms to discourage short-termism and align management interests with long-term company growth [2]. Regulation of Controlling Shareholders and Actual Controllers - The new rules impose strict limitations on potential conflicts of interest and require enhanced disclosure of non-material competitive activities to improve transparency [3]. - The responsibilities of the board in identifying and reviewing related party transactions have been clarified to prevent improper dealings from the outset [3]. Coordination of Rules and Systematic Improvement - The new regulations ensure alignment with existing laws such as the Securities Law and the Management Measures for Independent Directors, enhancing the overall regulatory framework [4]. - The CSRC has allowed a transition period for companies to adjust their internal systems in light of the new Corporate Governance Code, providing ample preparation time before the implementation date [4].