This article is based on a presentation given by Professor Kolja Roman Targan (Professor at University of Science and Technology of China) at the SCLA Global Meet ‘One Belt One Road and New Opportunities’ on 31 January 2020. It was drafted by Mr Carlos Li of the Chinese University of Hong Kong for the SCLA’s report on the event. For the benefit of our readers, we are now publishing it online for the first time to help us understand and unite our changing world.
Professor Targon, a tax expert, quoted the chancellor of Germany as saying that it is important for states to work together. In the context of Africa, the countries therein are not only social recipients but also important partners.
Turning to his second subject pertaining to the uniform policy with China, he emphasised that China is a good partner in many respects such as trading and investment. In the forthcoming summit 2020, one of the themes is to surround how to take a uniform position with China from the positive perspective. There are three main issues, namely 1) investment agreements with China, 2) cooperation between Africa and China 3) corporate social responsibility (“CSR”).
In terms of CSR compliance, it is about the collective agreement with social partners by which a positive impact could be brought about on society. The minimum requirement for a company is to comply with social norms and related responsibilities including but not limited to environment protection, consumer protections, human rights, public health etc. Through CSR compliance, companies should not only put their sights on profit but also maximize the value of stakeholders through the whole society.
In Germany, corruption, bribery and unfair competition ravaged the whole Germany in the past. However, there has been a huge change of understanding CSR in the past two decades. The key words of CSR are legal contracts through compliance.
Active shareholder engagements in the decision-making process of board of directors in key aspects include1) remunerations of directors and 2) related party transactions and 3) knowing your shareholders/directors should be advocated. Transparency by means of registering the legal and beneficial ownerships should be promoted as beneficial owners are not always legal owners.
In the Q&A session, Ms Yuenyuen Wang also shared her view on how the German style CSR differs from the Chinese. She introduced herself as a former employee at Airbus and Cathay Pacific and noted that there are a lot of differences between China and Germany in terms of CSR. She argued this was largely attributable to the nature of the companies; i.e. State-owned enterprises or private companies.
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