Corporate Governance | Process and Key Considerations for the Succession of Directors, Supervisors, and Senior Management of Listed Companies

In the aforementioned case, Ciwen Media’s response addressed the issue of the Company Charter imposing relatively high eligibility requirements on shareholders entitled to nominate directors, arguing that: (i) the company’s equity is highly dispersed; (ii) such restrictions aim to prevent individual investors from leveraging small shareholdings to seize corporate benefits; (iii) the cumulative voting system for director elections remains intact; and (iv) the rights and interests of minority shareholders are not impaired. The qualification review process manifests itself in three aspects: First, the nomination committee’s authority to conduct reviews. According to the "Guidelines for the Articles of Association of Listed Companies", stock listing rules applicable to various market segments, and guidelines for standardized operations of listed companies on respective market segments, directors and other officers must possess the qualifications prescribed by law. Article 41 of the "Corporate Governance Guidelines for Listed Companies" stipulates that the nomination committee bears responsibilities for identifying qualified director candidates and reviewing such candidates, and recommending them to the board. The wording of this provision explicitly confers upon the nomination committee the authority to review the eligibility of director candidates. In practice, many listed companies proactively disclose the nomination committee’s review opinions regarding board succession elections or director candidates, as follows: Moreover, judicial precedents also reflect courts’ attention to the nomination committee’s review of candidates’ eligibility. For instance, in the case of Chen Libing v. Shanghai Shenkai Petroleum Chemical Equipment Co., Ltd. (Case No. (2017) Hu 01 Min Zhong 9322), a minority shareholder, Mr. Chen Libing, contended that the procedure for appointing additional directors violated procedural requirements, because it bypassed the nomination committee’s review and was not approved via a formal board resolution. Instead, three founding shareholders convened an extraordinary general meeting to pass the resolution on appointing additional directors. The appellate court held: “Given Shenkai Company’s exceptional circumstances in 2016—namely, severe understaffing of its third-term board of directors and board of supervisors, coupled with two incumbent directors being unable to perform their duties due to special reasons—the continued existence of such abnormal conditions would inevitably paralyze the board’s and supervisory board’s convening, deliberation, and voting mechanisms, thereby directly undermining Shenkai Company’s normal operations and jeopardizing the legitimate rights and interests of its broad investor base. Under these extraordinary circumstances, the three founding shareholders properly invoked the temporary proposal mechanism stipulated in the Company Charter, requesting the extraordinary general meeting to resolve the appointment of additional directors for the third term. Their status as proposers, the proposal procedure, and the proposal content all complied fully with both the Company Charter and applicable laws. Furthermore, Shenkai Company’s supplementary announcement regarding the addition of the temporary proposal and its disclosure of basic information about the candidates were likewise fully compliant with the Charter and legal requirements.” The court further noted: “As one of Shenkai Company’s investors, Mr. Chen Libing objectively did not participate in the voting on the three contested resolutions. Nevertheless, his grounds for litigation were not maliciously motivated, and to some extent reflected investors’ concern and oversight over the listed company. The emergence of this dispute also reveals certain communication and interaction barriers between Shenkai Company and its minority investors.” Based on this case, we draw two key insights: (1) To date, we have not identified any judicial precedent where a court has directly invalidated a resolution solely on the ground that candidate qualifications were not reviewed by the nomination committee. Nor did the court in the above case expressly address this specific issue. Thus, we understand that the legal consequence of failing to submit candidates’ qualifications for nomination committee review primarily lies at the level of corporate governance non-compliance, potentially triggering inquiries from securities regulatory authorities; (2) This case also suggests that companies could enhance the specificity and granularity of their information disclosures. From the perspective of safeguarding minority shareholders’ right to be informed, proactive disclosure of information—including the nomination committee’s review opinions—may be advisable.

Rules of Procedure for Board Meetings of Limited Liability Companies

Chapter I General Provisions Article 1 These Rules are formulated to protect the lawful rights and interests of the Company and its shareholders, clarify the duties and authority of the Board of Directors, standardize its procedures, and ensure the Board’s operational efficiency, scientific decision-making, and compliance with regulations, pursuant to the "People’s Republic of China Company Law" (hereinafter referred to as the "Company Law"), the Company’s Articles of Association, and other relevant laws and regulations. Chapter II Directors and Independent Directors Article 2 A director of the Company shall be a natural person. Directors need not hold equity in the Company. Article 3 The Company’s directors include independent directors. The Company shall progressively establish and improve its independent director system in accordance with relevant PRC regulations governing independent directors. Article 4 Any person falling under the circumstances specified in Articles 57 and 58 of the Company Law shall be disqualified from serving as a director of the Company. Article 5 Directors shall be elected or replaced by the shareholders’ meeting and shall serve three-year terms. Upon expiration of their term, directors may be re-elected for successive terms. Prior to the expiration of their term, directors may not be removed from office without cause by the shareholders’ meeting. Article 6 Directors shall abide by laws, regulations, and the Company’s Articles of Association, fulfill their duties of good faith and diligence, and safeguard the Company’s interests. Where their personal interests conflict with those of the Company or its shareholders, they shall act in the best interests of the Company and its shareholders. Article 7 Directors bear confidentiality obligations regarding the Company’s core technical information and other confidential information, which remain in effect until such information is officially disclosed by the Company or becomes publicly available. Article 8 Unless expressly authorized by the Board, no action taken by any director shall be deemed valid unless conducted in the name of the Board. Article 9 A director who fails to attend two consecutive board meetings in person and does not delegate attendance to another director shall be deemed incapable of performing his or her duties and shall automatically forfeit directorship. The Board shall recommend to the shareholders’ meeting that such director be replaced. Article 10 The Company shall not, in any form, pay taxes or expenses otherwise payable personally by directors. Article 11 The following persons shall not serve as independent directors: (1) Personnel employed by the Company or its subsidiaries, and their immediate family members and principal social relations (where “immediate family members” means spouses, parents, and children; and “principal social relations” means siblings, parents-in-law, sons- and daughters-in-law, spouses of siblings, and siblings of spouses); (2) Natural persons holding more than % of the Company’s equity, either directly or indirectly, or natural person shareholders among the Company’s top shareholders and their immediate family members; (3) Personnel employed by entities holding more than % of the Company’s equity, either directly or indirectly, or by entities among the Company’s top shareholders, and their immediate family members; (4) Persons who fell within any of the categories described in items (1)–(3) above within the past year; (5) Persons providing financial, legal, consulting, or similar services to the Company or its subsidiaries; (6) Other persons prohibited from serving as independent directors under the Company’s Articles of Association; (7) Other persons designated as ineligible by the China Securities Regulatory Commission (CSRC). Article 12 Independent directors shall express independent opinions to the Board or the shareholders’ meeting on the following matters: (1) Nomination and removal of directors; (2) Appointment or dismissal of senior management personnel; (3) Remuneration of directors and senior management personnel; (4) Loans or other fund transfers between the Company and its shareholders, actual controllers, or their affiliated enterprises—whether existing or newly arising—with aggregate amounts exceeding RMB million or % of the Company’s most recently audited net assets, and whether effective measures have been adopted to recover outstanding payments; (5) Matters that independent directors deem likely to impair the rights and interests of minority shareholders;

Northern Technologies International director Sunggyu Lee to step down after 2027 annual meeting

Sep 23, 2026

Northern Technologies International director Sunggyu Lee will not seek re-election in 2027, amid record sales impacted by higher raw material costs and recent leadership changes appointing Gautam Ramdas as CEO.

Investing.com

Northern Technologies International director Sunggyu Lee to step down after 2027 annual meeting

Investing.com Canada

Northern Technologies Board Member Sunggyu Lee, Ph.D., to Retire at 2027 Annual Meeting

Kalkine Media

2026-09-23

Northern Technologies International director Sunggyu Lee to step down after 2027 annual meeting

2026-09-23

Sunggyu Lee to Not Seek Re-election to Northern Technologies International Board

Northern Technologies International director Sunggyu Lee to step down after 2027 annual meeting

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