After the completion of financing restructuring in shareholding reform, ICBC will shed its non-performing assets burden and solve the problem of capital insufficiency. ICBC is now equipped with a foundation of "Good Bank". Then what is next step of ICBC shareholding reform? ICBC spokesman said that, ICBC will concentrate in corporate governance during the second half year. Efforts will be continued to complete 17 projects in corporate governance to fully implement shareholding reform.

ICBC spokesman introduced that ICBC all the while has taken corporate governance as the key to shareholding reform. Before approval of shareholding reform plan, massive preparation work targeting at corporate governance were on the way according to Regulations of Banking Regulatory Commission and "Strengthening Bank's Corporate Governance" from Basel Committee. In completing corporate governance, ICBC has instituted 17 projects which are: Corporate Governance Structure Design, ICBC Development Strategy Design, Organization Structure and Business Flow Restructuring Plan, 12-Grade Credit Assets Classification, 5-Grade Non-credit Assets Classification, Personnel Incentive Mechanism Reform Plan, New Performance Assessment Method, Change of Financial and Accounting System, Full Risk Reserve Allocation System Set-up, Financial Consolidation Reform, Fund Consolidation Reform, Fund Management and Economic Capital Allocation Plan, Interests Rate Risk Management Framework Design, Operating Risk Management Framework Design, Information Disclosure System Establishment, Internal Evaluation Method Engineering, Completion of Audit Scheme by Department by Products, Information Technology Construction Plan.

Currently, some of these projects have been completed or basically completed after hard efforts. ICBC's new corporate governance mechanism is now in the process of near completion. Second phase of Internal Evaluation Method started as scheduled. Preparation works on 12-Grade Credit Assets Classification, 5-Grade Non-credit Assets Classification are fully in place. Full Risk Management Framework is basically in shape. Financial Consolidation Reform also got new breakthrough. On this account, ICBC continued to concentrate in finalizing and implementation of these projects during the second half year. Regarding the details of the projects, ICBC spokesman revealed that during the second half year, ICBC strive in the design of corporate governance structure, establish scientific capital management scheme, spend efforts in information disclosure work, start the conversion of old and new financial accounting system, launch organization reform at the right time and further flow restructuring plan, establish human resources management scheme of a modern financial corporation and breakthrough in incentive-restraint mechanism.

In the design of corporate governance structure, ICBC continue to make full preparation. Preparation and approval submission of legal documents as Shareholding Company Regulation and Initiator Agreement are on the way. Council Rules and High-Management Working Rules of "Three Meetings" and all specialized committees are instituted according to law specification. ICBC actively work with concerned State Departments to build a modern corporate governance structure.

Set-up of Capital Management Scheme will be proceed from three aspects: First, establish a Capital Management System Scheme that met with Regulations and ICBC's development strategy. Second, complete the total capital amount in respect of legal representative and structural management, set-up coordinated interactive mechanism between supervisory capital management, economic capital management and carrying capital management. Third, implement the effective connection of economic capital with such management functions as overall planning, performance evaluation, financial management, product pricing and risk monitoring. ICBC will scientifically measure the economic capital amount that covers all credit risks, market risks and operating risks according to the assets and liabilities after financial restructuring at the end of June. Economic capital is allocated to all branches. Efforts will be spent in gradually setting up index scheme centered on risk-adjusted capital return rate. Evaluation will be conducted on Branches' operating performances.

Moreover, ICBC is formulating the implementation of information disclosure and reporting system to gradually improve disclosure standard. Recent work will be concentrated in auditing and due diligence to prepare for compiling Interim Report after financial restructuring, and timely disclose relevant information.

Organization reform and flow restructuring means further adjustments made in number of organizations and distribution layout. Set-up of functional organizations will be based on the restructuring of business flow. Widely launch the horizontal management, build an internal organization system from the top to the end with scientifically division of labor, effectively balanced and highly-coordinated complete the matrix management model with a combination of bars and blocks. Attempts will be taken in exploring vertical management and Service Unit System. Timely improve the system of authorized operation, management by level and responsibilities-in-steps. Improve the operation management efficiency of the whole bank.

On the foundation of the reform in personnel labor and allocation system in recent years, establishment of human resources management scheme and incentive-restraint mechanism leverage such international consultancy company to design a Job Grading Plan based on job classification and ranking evaluation. Ratio of organization staffing will be controlled so as to strengthen human cost constraint. Staff Placement mechanism will be improved. Recruit the best people from the market. Establish Payroll Management Committee to scientifically design payroll scheme using performance, capability and market price of the job as basis factors.