In every country, who runs the biggest banks and who is on the Board of Directors of those banks are important part of the how the system works. The banks lend money and it not surprising some of the bigger clients are on the Board, although with most companies they always deal with more than one bank. Often times the relationships of the economy can be seen through the Boards.

In an article from Reuters, the relationship between the government and the banks is clearly seen through the policies of the government. In China, because of the economic slowdown and lower property prices, the economy is suffering and one method is to blame corruption.

Former Bank of China Chairman Liu Liange stepped down in March 2023 and was placed under investigation by the anti-graft watchdog accused of accepted bribes of $22.9 million.

Bank of Chain Vice-Chair and President Liu Jin resigned for personal reasons. The state-owned lender said its Board approved Chairman Ge Haijiao to serve as acting President.

Mr. Jin had been President since April 2021 and was previously President of China Everbright Bank from January 2020 to March 2021, and VP of China Development Bank September 2018 to November 2019. Mr. Jin had also worked for state-owned Industrial and Commercial Bank, the world’s largest lender by assets, as head of investment banking.

Linking to dividend paying stocks, clearly Mr. Jin was a rising star in China’s banking world and you can read what you want into why he left, except he left quickly. It is also important to note the Board selected a successor in a quick time. One of the prime functions of the Board is to look at succession plans and access talent in the organization to take over from current management. As you do your homework, you may be attracted to or like the stories of people in the company. As they move through the ranks and you believe they are doing a good job for investors, you own stock. Understand everyone in the company can be replaced and it a crisis they often are.

There are more questions than answers, till the next time – to raising questions.