) it stresses the role of the board in establishing a high ethical standard, complying with laws and regulations, exercising internal control and disclosing financial information. ( 2 ) it stresses the independence of the board, which shall not only be independent from the executive management, but also be independent from controlling shareholders. ( 3 ) it stresses the importance of information disclosure with respect to connected transactions, resolutions adopted by committees under the board, procedures of meetings and their structure, etc. the revised principles of corporate governance issued by the oecd in 2004 further expanded the concept of corporate governance. in the process of transition to a market economy, china has primarily introduced the concept of corporate governance and its principles. in this regard, further studies of international experiences in corporate governance need to be conducted to follow any new development and strengthen relevant perceptions and practices. the development of china ’ s capital market is, to a large extent, determined by the quality of listed companies, which is closely linked with corporate governance. with the enrichment of our understanding and experiences in corporate governance, i am confident of china ’ s capital market development in the future. since we have discussed most issues associated with corporate governance, our understanding of this important issue is very much improved. as we gradually move to consensus on the residual issues, rules and practices will be definitely improved as well. the strengthening of corporate governance will lay a solid foundation for the development of china ’ s capital market, and thus will play an important role in helping transform the relationship between banks and enterprises.

4 ) all the barriers impeding cross - border voting shall be removed. third, more emphasis is put on the resolution of interest conflicts. based on the 1999 version that stresses disclosure of interest conflicts, the 2004 version requires the interest parties involved to disclose the way of resolving interest conflicts. in addition, it also takes note of the conflict of interests existing between the big and small shareholders in the emerging markets. it ( 1 ) adds a new principle that requires rating and research agencies to reasonably handle conflicts of interest when disclosing information about the company ; ( 2 ) clarifies auditing responsibility by stating that the auditors shall be responsible to the board ; ( 3 ) strengthens the independence of auditing and defines the steps that should be taken by the auditors to manage and alleviate potential interest conflicts ; and ( 4 ) pays more attention to the protection of small shareholders ’ interests and states that “ the interests of small shareholders shall be protected and they shall be effectively compensated for any direct or indirect impairment caused by the controlling shareholders ”. fourth, it puts more emphasis on the protection of stakeholders and whistle blowers. it, to a larger extent, stresses the rights and role of employees and creditors. ( 1 ) it clearly states to establish a mechanism that “ enhances the participation of employees ”. stakeholders, including individual employees and their representatives, shall be able to freely express their views to the board with respect to any illegal or immoral activities. employees ’ views and their rights to express the views shall be respected and protected. it shall be ensured that information can flow safely and confidentially to the board. ( 2 ) corporate governance shall ensure the enhanced participation of employees, through which the information of employees ’ special skills can flow to the management, benefiting the company directly or indirectly. the examples of employees ’ participation include increasing representatives of employees in the board, adopting the plan of employees holding of stocks and establishing a profit sharing mechanism such as pension contribution. for instance, pension contributions can be pooled into an independent fund and the fund manager shall be independent from the company ’ s management in terms of business operation. ( 3 ) it stresses the important role of creditors in corporate governance and external supervision. it also states that effective and efficient liquidation framework and credit rights enforcement mechanism are important supplement to effective corporate governance, ensuring effective protection for the rights of the shareholders. the importance of employees and creditors is raised in the new version. fifth, it further stresses the responsibility of the board. ( 1