Dr. Ma Mingzhe, Founder and Chairman of Ping An Insurance (Group) Company of China, Ltd. (Ping An) was awarded in the Directors Of The Year Awards 2021 in the “Listed Company - Executive Director” category from the Hong Kong Institute of Directors (HKIoD). Led by Dr. Ma, the company’s Board of Directors was also awarded in the Directors of the Year Awards 2021 in the “Listed Company - Board of Directors” category.
The awards are a testament to how a visionary chairman can lead a board to maintain a keen strategic sense and foresight to ensure that the strategic layout, implementation, and operational management stay one step ahead of others.
“Dr. Ma Mingzhe has always been visionary. He had the foresight to invest in technology early. He saw, before the rest of the traditional financial services industry, that the internet economy was affecting every aspect of people’s lives and he seized the opportunity,” the panel of judges said.
“He has adopted best global practices in corporate governance and risk management, resulting in a corporate culture that supports technology innovation, transparency, integrity, effective communication, and social responsibility.”
Mr Yao Bo, Co-CEO and Board Director of Board of Ping An, also spoke highly of Dr. Ma.
“As the founder of Ping An Group, Dr. Ma established the cultural foundation of Ping An. His pursuit of professionalism, continuous innovation, far-sighted strategic vision, global perspective, and open mind has had an unparalleled impact on Ping An’s corporate governance,” he said.
Strengthening expertise and staying ahead
Ping An is one of the largest insurance companies in China today. The company and its directors have won praise for their innovative approach to business and leadership. For the Board of Directors led by Dr. Ma, competition and innovation are inscribed in the company’s DNA.
Mr Yao recalled that the company was founded at a time when China had just started its reform and opening up.
“From the moment of its birth, Ping An has insisted on the concepts of thriving through competition, and developing through innovation, which is the representation of the DNA of Shekou, Shenzhen, and the essence of Ping An’s culture,” Mr Yao said.
“With the gene to innovate, Ping An worked hard and started its business and became the first joint-stock insurance company in China. It was the pioneer in the exploration of the joint-stock system,” he added.
In addition to the spirit of innovation, the concept of professionalism creating value is also important to ensure sustainable value growth for all stakeholders.
Mr Yao explained that Ping An has always adopted leading industry standards to maintain its leading position. The company has adopted practices such as employing international accounting firms, introducing a modern actuarial system, introducing a life insurance marketing system, and building the largest integrated financial centralized backup platform in Asia.
Led by the company’s Board of Directors, Ping An is more sensitive to technological developments than other traditional financial services companies. Mastering advanced technology has become an important means for the company to maintain its professionalism.
Mr Yao added that to ensure a steady growth of the main financial business, Ping An has continued to increase investment in technology serving the needs for the business’s transformation and upgrade, and use technology to help the financial business improve its efficiency.
It is worth mentioning that Ping An Smart City’s smart healthcare team developed an intelligent film reading system in 2020 to assist doctors in the early diagnosis and treatment of COVID-19 and help control the outbreak. The system takes only about 15 seconds to produce intelligent analysis results, with an accuracy rate of more than 90%.
Mr Yao said that the company’s development relies on a team of outstanding talents.
“Ping An recruits a large number of outstanding talents based on its strategy and business development needs. For example, since the launch of its ‘Finance + Technology’ strategy, Ping An has a team of over 110,000 technology practitioners and over 4,500 scientists as of the end of December 2021,” Mr Yao said.
It is with the spirit of pioneering, innovation, and self-improvement, coupled with a professional culture, that Ping An has grown from an insurance company with only 13 employees to a comprehensive financial services group with assets exceeding RMB 10 trillion over the past 33 years, its key indicators have entered the leading position in the world’s financial insurance industry.
Remain open-minded and learn best practices
Ping An’s extraordinary achievements are due to the leadership of the Board of Directors. Mr Yao pointed out that the development strategies of the Board are consistent with the company’s development, which is to maintain diversity, professionalism, and foresight.
In his view, Ping An is a large integrated financial group with a wide range of complex businesses, which makes the diversity and professionalism of the Board of Directors particularly important.
Therefore, Ping An has established a board of directors with local strengths and an international perspective. Out of the 15 board members, 53% have overseas working experience. The company has a board diversity policy that successfully ensures a balance of skills, experience, and diverse perspectives among board members, thereby enhancing the effectiveness and good corporate governance.
Mr Yao added that the company’s directors have remarkably high professional qualifications and rich practical experience in corporate management, law, investment, actuarial, insurance, banking, finance and accounting, technology, and economics, both domestically and abroad.
Mr Yao also emphasized the importance of learning about good governance practices when it comes to building a professional board of directors.
“Ping An has learned foreign governance models, built a management system that is in line with international standards, and established systems and processes for comprehensive risk management, internal control audits, stress testing, firewalls, and information disclosure by drawing on global best practices,” Mr Yao said.
The Board of Directors’ effective communication, smooth decision-making mechanisms and good discussion atmosphere are particularly important for producing decisions of superior quality.
Mr Yao explained that Ping An’s Board of Directors includes experts in various fields and that the experts will draw on their expertise and work experience to provide professional advice and recommendations on a wide range of corporate issues.
“Therefore, the Board of Directors is more cautious in making major decisions, especially those involving major strategies and development directions, and spends more time on exploring and making multi-dimensional views and recommendations," Mr Yao said.
Before making decisions, the Board ensures each director is up-to-date with the latest developments of the company.
“The company has adopted a series of mechanisms and means to ensure directors have multiple channels to understand the company’s operation and management status and fully obtain the information needed for decision-making,” Mr Yao said.
Mr Yao added the directors, especially independent directors and members of the Supervisory Committee make up an inspection team to understand the primary business operation. They get to know how frontline staffs implements company strategies and policies, as well as their opinions and suggestions on the company’s business development through staff discussions and customer visits.
“The Board of Directors of Ping An has created a culture of full discussion, free speech, willingness to share, and mutual respect and trust for all directors and the Board has been able to give full play to the team decision-making to ensure the quality of decisions on major corporate issues,” said Mr Yao.
Innovate to change and move forward
Mr Yao said that the insurance industry has been changing over the past decade, and Ping An has adjusted its insurance products in response to the market environment. For example, he said that the traditional crude life insurance model has been challenged by the continuous changes in the macro-environment, rising customer demand, the rapid changes in technology, and the ageing population.
Ping An has taken the lead in the industry in promoting life insurance reform.
“The reform was officially launched in the second half of 2019,” Mr Yao said, “Ping An will continue to improve the quality of its agent force and move from pursuing quantity to pursuing quality and quantity simultaneously. In addition, the reform will make use of technology to drive change and realize a fully digitalized operation.”
The Board of Directors is also alert to the impact of the global trade situation and the pandemic.
“In recent years, the Chinese economy has been under certain downward pressure and the asset quality of individual industries has been exposed to greater risk, such as the real estate industry. Real estate is one part of the company’s investment portfolio, the decline in asset quality poses a risk to the company,” Mr Yao noted.
In this regard, “Ping An has always been sensitive to the changes in the external environment. The company has taken the initiative to improve the overall risk control system from top to bottom, always pay attention to the industry’s movements, and strengthen the risk control in certain industries,” Mr Yao added.
To improve risk control, non-executive independent directors have been added to the Board of Directors. The restructuring is in line with global best practices in corporate governance, and the increase in the proportion of independent directors will help the Board improve its risk control system.
The company is also at the forefront of Environmental, Social and Governance (ESG) practices, which has attracted considerable attention. The company has signed the United Nations’ Principles for Responsible Investment and released the first Task Force on Climate-related Financial Disclosures report in mainland China.
Facing future challenges, the Board of Directors of Ping An will lead the company to move forward.
“The Board will continue to uphold the highest standards of corporate governance, adhere to strict risk management and internal controls, ensure the healthy and sustainable development of the company’s strategy and business, realize our corporate value of fairness,” said Mr Yao.
“The company is committed to the long-term, stable and healthy development for its shareholders, investors and other stakeholders, and to creating sustainable development.”
Source: The Hong Kong Institute of Directors