China State Construction to abolish supervisory board, revamp governance

China State Construction Engineering Corp (CSCEC) has scheduled its first extraordinary general meeting for 2025 on December 12, 2025, to vote on several key corporate governance changes. The most notable proposal is the abolition of the supervisory board, with its functions to be transferred to the audit and risk committee. This move, driven by revisions to the "Company Law" and regulatory requirements, aims to streamline the company's governance structure. The current supervisory board members' positions will be dissolved.

In addition to the supervisory board's removal, CSCEC proposes extensive revisions to its articles of association, shareholder meeting rules, and board meeting rules, impacting 115 articles across 12 chapters of its articles of association. Key changes include refining shareholder rights, enhancing board and director responsibilities, and introducing a dedicated internal audit section. These amendments also address enhancing the independence and duties of independent directors and establishing a specialized independent director meeting mechanism.

Shareholders will also vote on renewing "Comprehensive Service Framework Agreements" with China State Construction Group and "Financial Service Framework Agreements" with China Construction Finance Co. Ltd. These agreements, which cover sales, procurement, commercial factoring, financing leases, and property leases, are projected to involve transactions up to RMB 36.12 bn in 2026. The board and supervisory committee have unanimously approved these proposals, recommending them for shareholder review.