Sinopec Corporation of China - Setting Standards in Corporate Governance
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Case Code: CGOV003 Case Length: 20 Pages Period: 2002 - 2003 Pub Date: 2005 Teaching Note: Not Available |
Price: Rs.300 Organization: Sinopec Corporation Industry: Petroleum & Chemical Countries: China Themes: Coporate Governance |
Abstract Case Intro 1 Case Intro 2 Excerpts
"In line with international practice, the China Petroleum & Chemical Corporation (Sinopec) has adopted a standard corporate governance framework, including a board of directors, a board of supervisors and executive managers."
- People's Daily Online.
"We shall continue to improve our competitiveness in the international arena, and shall endeavor to build the Company into an international integrated energy and petrochemical company with outstanding core business, quality assets, diversified equity structure, innovative technologies, professional management, prudent financial practice, and the ability to compete in the global market by year 2010."
- Chen Tonghai, Chairman, Sinopec in Interim Report, August 2003.
Winning Laurels in Corporate Governance
In February 2003, Asset listed Sinopec Corporation (Sinopec) (also known as China Petroleum and Chemical Corporation) among the 'best corporate governance companies in China' for 2002. The winners were decided based on the votes of 145 global institutional investors, who owned assets to the tune of $185 billion in the Asia-Pacific region.
Sinopec also found a place in the March 2003 issue of CFO Asia,4 which published the list of companies that won the 'Best Asian Annual Report 2001' award. Sinopec was the only Chinese company that figured in the list. Sinopec's annual report was adjudged as 'highly transparent - most comprehensive in information disclosure.
The report provided in-depth information on financial matters, business review and prospects, stock prices, board of directors' report, investor relations, and corporate governance. Sinopec always followed the International Financial Reporting Standards (IFRS) while preparing its financial reports (Refer Exhibit I). It was not just the above awards and recognitions. Over the years, Sinopec had bagged several awards and recognitions for its good corporate governance practices (Refer Exhibit II). Analysts felt that the credit went to Sinopec's corporate structure that decentralized decision-making and delegated authority to the middle and lower level management (Refer Exhibit III). Sinopec's strategic business units handled all its business operations. The company followed international rules and regulations for its corporate governance practices.
Reinforcing Sinopec's commitment to follow the best corporate governance practices, Chen Ge, Secretary to the Board of Directors, Sinopec, said, "Sinopec is committed to the fair treatment of all shareholders and our corporate governance policies are in line with Chinese and international standards. We believe Sinopec has one of the strongest corporate organizations in China and is at the forefront in the adoption and implementation of meaningful governance policies."
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