II. FO's Observation of Compliance Development Trends in Chinese Enterprises
With the increasing trend of internationalization, Chinese enterprises have entered the stage of dual circulation of international and domestic business fields and scope. As early as 2010, the World Bank Group issued the Integrity Compliance Guidelines, which released standards, principles, and content for good corporate governance. Based on this, an effective compliance management system has been developed. In order to better promote the development of the Chinese economy, accelerate the integration of Chinese enterprises with international enterprises, and implement enterprise compliance management, it has become one of the most important tasks for Chinese enterprises at present. In 2016, the State owned Assets Supervision and Administration Commission of the State Council of China designated several stated owned companies as pilot units, in order to explore experience in central stated owned enterprise compliance management and promote the construction of compliance management in Chinese enterprises.
At present, strengthening enterprise management capabilities and preventing compliance risks have become a new trend in the development of Chinese enterprises. From an international perspective, the international standard "Requirements and Guidelines for the Use of Compliance Management Systems" (ISO37301:2021) was officially released and implemented in 2021; From a domestic perspective, in 2022, the international standard "Compliance Management System Requirements and Guidelines for Use" (GB/T35770-2022) was released; The State owned Assets Supervision and Administration Commission of the State Council has issued the "Compliance Management Measures for Central Enterprises", which provides reference and guidance for the compliance management of central enterprises. The China Association of Small and Medium sized Enterprises has formulated and released the first national compliance evaluation standard for small and medium-sized enterprises - "Evaluation of the Effectiveness of Compliance Management Systems for Small and Medium sized Enterprises", which distinguishes and sets corresponding evaluation methods, evaluation processes, and evaluation indicators for enterprise compliance management systems. In order to assist small and medium-sized enterprises in building compliance management systems and enhancing their compliance management capabilities.
From an industry perspective, China's administrative compliance began in the financial industry. From 2006 to 2020, corresponding documents have been successively issued, such as the "Guidelines for Compliance Risk Management of Commercial Banks" (2006), "Guidelines for Governance of Trust Companies"(2007), "Measures for Compliance Management of Insurance Companies"(2007), "Guidelines for Governance of Listed Companies"(2018), and"Guidelines for Governance of Securities Companies"(2020).
The compliance regulatory environment for domestic and foreign enterprises is becoming increasingly strict, and China's regulatory laws and policies are constantly improving. The importance of corporate compliance is increasingly prominent. When the compliance system of a company is not sound, it will hinder the development of the company itself. With the joint efforts of all parties, establish a corporate culture and values of operating in accordance with the law, optimize the legal business environment, scientifically and reasonably set up compliance management institutions, establish and improve mechanisms for preventing, identifying, and responding to corporate compliance risks, and achieve a stable and far-reaching compliance governance system.
The compliance process of Chinese enterprises inevitably promotes the stability and security of investment. Firstly, the legitimate rights of enterprises are further protected. Secondly, to better maintain a fair and just market order and environment. Thirdly, to effectively prevent and avoid business risks and reduce losses for enterprises. On the one hand, corporate compliance can minimize the occurrence of these risks to the greatest extent possible; On the other hand, after the enterprise provides compliance evidence, law enforcement agencies will also reduce penalties based on the actual situation. Fourthly, the entry requirements for enterprises to carry out cooperation emphasize the review of the compliance capabilities of business partners. And the fifth is to ensure the long-term and sustainable development of enterprises.
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