Reconceptualizing the Duty of Care of Chinese Commercial Bank Directors: An Inclusive Finance Perspective

At the Third Plenary Session of the 20th CPC Central Committee, “Promoting inclusive finance for high-quality development” was acknowledged as a strategic objective to further financial system reform. As the main enforcers of policy, commercial banks must shift from lax advocacy to stringent regulatory requirements, integrate directors' care duties with inclusive financial governance, and acknowledge the strategic importance of this type of governance in financial system change. Three facets of financial inclusion are revealed by looking at the policy logic of financial inclusion, the normative relationships between directors' care and governance, and the strategic alignment of corporate objectives with social responsibility: accurate resource allocation, universal service coverage, and affordable pricing. The implications of these findings for directors of commercial banks are also explained. Give directors of commercial banks precise guidelines on how to enhance decision-making, expand their care duties, and fortify their supervisory obligations. To create a comprehensive system of directors' fiduciary responsibilities, including organizational compliance monitoring, early warnings, and information disclosure, create a tiered governance framework with front-end organizational incentives and alignment, middle-end transaction risk monitoring, and back-end data disclosure and accountability, Form a closed-loop governance mechanism of “organization promotion- compliance monitoring and early warning-information disclosure” for the care obligation of directors of commercial banks, establish a combination of subjective and objective performance standards, put forward suggestions for rule improvement based on the opportunity of the revision of the Commercial Banking Law, and form a new inclusive financial governance system driven by policy orientation and rule of law logic.