China Shenhua Advanced Research on Audit Committee Working Mechanisms for State-Controlled Listed Companies Under the Revised PRC Company Law

Recently, China Shenhua invited senior experts from regulatory agencies, industry associations, key universities, and professional institutions to form a review panel for the mid-term review of the research project Research on the Working Mechanism of Audit Committees of State-Controlled Listed Companies Under the Revised Company Law of the People’s Republic of China. The review further helped the Company improve its corporate governance system under the new legal framework and give full play to the Audit Committee’s core oversight role.

After fully hearing the project team’s report on key aspects including research background, research approach, overall plan, and mechanism design, the review experts highly affirmed the preliminary work of the project. They held that the topic closely addressed the major practical issue of governance structure reform in state-controlled listed companies following the implementation of the revised Company Law of the People’s Republic of China. The study demonstrated a well-defined research approach, a rigorous and science-based methodology, and comprehensive and accurate data. The working mechanism design demonstrated strong innovation, and the interim results were of important theoretical value and practical guiding significance. In addition, the review experts focused on the core issue of building the working mechanism of audit committees of state-controlled listed companies, fully expressed their views, and offered constructive opinions and suggestions on further optimizing and improving the audit committee coordination mechanism, information disclosure, and evaluation system, thereby charting the course for further research.

China Shenhua attaches great importance to developing its corporate governance system. In 2025, with approval from the General Meeting of shareholders, the company completed the reform of its Supervisory Committee, under the reform, the Audit and Risk Management Committee of the Board of Directors exercises the functions and powers previously held by the Supervisory Committee, and concurrently launched this project. The research is aligned with the RPC Company Law and RPC Audit Law , focuses on theoretical bottlenecks and practical difficulties concerning audit committees, and is guided by a clear theoretical framework, aligned with relevant policy requirements, and oriented toward solving practical problems. It has developed a working mechanism that integrates form with substance, internal and external perspectives, and top-down and bottom-up considerations. It will be highly replicable, instructive and exemplary for state-controlled listed companies and will serve as a valuable reference for improving internal audit regulations and the working rules for audit committees of listed companies.