Core Viewpoint - The article discusses the ongoing trend of listed banks in China abolishing their supervisory boards in response to the new Company Law, which allows for the establishment of audit committees within the board of directors to assume the supervisory functions previously held by supervisory boards [6][7]. Group 1: Legislative Changes - The new Company Law, effective from July 1, 2024, permits joint-stock companies to set up audit committees composed of directors, which can perform the functions of supervisory boards [7]. - The National Financial Regulatory Administration has issued guidelines that align with the new Company Law, allowing financial institutions to choose whether to retain supervisory boards or delegate their functions to audit committees [7]. Group 2: Industry Trends - As of June 2023, 17 listed banks have announced the abolition of their supervisory boards, including major state-owned banks and various smaller banks [5]. - On June 27, 2023, five major state-owned banks held shareholder meetings to approve the removal of their supervisory boards [5]. Group 3: Implementation and Challenges - The audit committees will take over the supervisory functions, which include financial inspections and oversight of the bank's financial status and management [7]. - Concerns have been raised regarding the independence of audit committees, as they are composed of board members who may face conflicts of interest when supervising the board itself [8].

Core Viewpoint - The recent trend of abolishing supervisory boards among listed banks in China is driven by the implementation of the new Company Law and regulatory policies, allowing for a shift towards audit committees within boards of directors to assume supervisory roles [6][7][8]. Group 1: Legislative Changes - The new Company Law, effective from July 1, 2024, permits joint-stock companies to establish audit committees composed of directors, which can perform the functions of supervisory boards [6]. - The National Financial Regulatory Administration has issued guidelines that align with the new Company Law, allowing financial institutions to choose whether to maintain supervisory boards or delegate their responsibilities to audit committees [7]. Group 2: Industry Trends - As of June 2023, 17 listed banks have announced the abolition of their supervisory boards, including major state-owned banks and various smaller banks [5]. - On June 27, five major state-owned banks held shareholder meetings to approve the removal of supervisory boards, marking a significant shift in governance structure [1][5]. Group 3: Implementation and Challenges - The audit committees will take over the supervisory functions previously held by supervisory boards, focusing on financial oversight and internal control assessments [7][8]. - Concerns have been raised regarding the independence of audit committees, as they are composed entirely of board members, which may lead to conflicts of interest in their supervisory roles [8].