Governance of the board of directors

The COFCO Board of Directors has established and improved the governance system, and organically unified the main role of the Board of Directors in “setting strategies, making decisions and preventing risks” and the executive role of managers in “planning operation, promoting implementation and strengthening management”. We continuously optimize the corporate governance structures, and clearly delineate the boundaries of power, responsibilities and interests among the Party leadership, the Board of Directors, and the management level. By refining decision-making content, procedures, and safeguards, we promote the effective performance of duties and responsibilities by governance entities, ensuring their operations are efficiently connected and coordinated. We have clarified the “working rules” and “decision-making list”, improved the operation mechanism, ensured that the Board of Directors had exercised its powers and performed its duties according to law, effectively implemented the decision-making power on major issues of enterprises and the management and supervision power of managers, kept improving the system of the Board of Directors of COFCO's subsidiaries, comprehensively promoted the construction of the Board of Directors of subsidiaries to realize that the Board of Directors should be fully established, with the majority of outside directors. We have established a communication mechanism between the Chairman and external directors, a reporting and implementation mechanism for managers, a pre-meeting for the Board of Directors, a legal compliance review mechanism prior to major decision-making meetings, and the participation of external directors in COFCO’s subsidiary budget meetings, among others. These measures aim to improve the quality and efficiency of decision-making on major issues, ensuring scientific and efficient decision-making when faced with significant opportunities and challenges, and vigorously promoting the high-quality development of our business. COFCO has been recognized as an “Excellent Board of Directors of Central State-owned Enterprises” by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) for three consecutive years, and has been successfully selected as “Demonstration Enterprise for Corporate Governance of State-owned Enterprises”.

Compliance operation

Integrity operation

Strictly abiding by laws, regulations and business ethics, COFCO regards integrity and compliance operation as the bottom line of business development. We engage in fair competition and mutually beneficial cooperation, opposing monopolies and unfair competition. Embracing the principle of good faith in all aspects of production and operation, we vigorously advance the construction of quality, character, and brand credibility, ensuring food safety, and enhancing the supply of high-quality products and services. Through collaboration with the entire industry chain, we promote the construction of integrity and compliance, fostering a culture of honesty and trustworthiness, and embedding legal compliance and integrity as the core essence of our "loyal and good character".

Legal compliance

COFCO has revised and improved the COFCO General Rules for Legal Compliance Management (2023 revised version). We have established a Chief Compliance Officer performance guarantee mechanism and an independent compliance management department. We have promoted specialized companies to improve their compliance management systems and progressed to build a team of full-time and part-time compliance managers across all companies. We have established a dedicated mechanism for management of rules and regulations, further improved international rules and regulations, enriched specialized compliance guidance, and achieved a full life cycle management of rules and regulations. We obtained an A grade in the SASAC's 2023 annual evaluation of the effectiveness of compliance management systems. We ensure the compliance of our major decisions and continuously promote the in-depth integration of compliance management with business development.

Risk prevention & control

In the past few years, in response to unexpected challenges rising both internally and externally, COFCO has continuously improved its risk prevention and control system. Focusing on the goal of "early warning and precise prevention and control", we have diligently carried out tasks such as risk assessment, dynamic monitoring, and timely response. We have established a long-lasting mechanism that can effectively identify risks, issue warnings, and initiate actions at the earliest time, thus laying a solid foundation for high-quality development. In line with the principle of "separation of construction and evaluation", COFCO has advanced system construction as well as supervision and evaluation. We have improved the "1+N" internal control system and formed a closed-loop internal control management mode that features "internal control construction, main responsibility management, self-evaluation, supervision and inspection, and accountability for violations". Through these efforts, we have facilitated the interconnection, full coverage, and effective operation of the internal system.

Anti-corruption

COFCO has persistently emphasized honest and clean Party conduct, full and strict governance over the Party, and a diligent and entrepreneurial political atmosphere. By means of "listing, project and inspection", we deeply explore, practice and refine the daily supervision and cast special attention to supervising key areas such as the control over food sources. We insist on giving full play to the role of disciplinary inspection, strictly and effectively promoting disciplinary inspection and rectification and building a normal, long-term rectification mechanism. We insist on paying close attention to the supervision in key areas and links working to address issues and prevent risks from the source. Considering the unique characteristics of the industry and our businesses, through case analysis and demonstration, we have carried out education sessions across all tiers, ensuring that all members "dare not", "can not", and "don't want" to conduct corruption.