SOEs to unify Party, board chairman posts

By Wang Jiamei and Huang Ge Source:Global Times Published: 2016/12/18 21:53:39

China's State-owned enterprises (SOEs) will promote a new management mechanism under which the positions of the Party secretary and the chairman of the board should be held by the same person, the 21st Century Business Herald reported on Saturday, citing an official from the State-owned Assets Supervision and Administration Commission (SASAC).

According to the tone-setting Central Economic Work Conference that ended last Friday, SOEs are required to accelerate the implementation of an effective corporate governance structure and establish flexible and efficient market-based management mechanisms, Chu Xuping, director of the SASAC's research center, said at an event on Saturday.

The new management mechanism will alter the management structure of SOEs and facilitate the coordination between the Party committee and the board, Feng Liguo, an expert at the Beijing-based China Enterprise Confederation, told the Global Times on Sunday.

Feng said that there had been many disputes concerning how to deal with the relationship between the Party committee and the board. "Since the two positions will be held by one person in the future, it will be an effective way to reduce the coordination cost between the two organs in a company."

As a company's board represents the rights of its holders, the combination will also help take control of the political direction of the holders, according to Feng.

Feng said that the Chinese government has rolled out comprehensive policies regarding SOE reform in 2016 and will continue to advance the development of pilot projects in the future.

Chu also listed the reform tasks of corporate governance for SOEs in 2017. For instance, SOEs should strengthen the Party's leadership and at the same time improve the corporate governance structure.

Other tasks include exploring the modern SOE system with Chinese characteristics, promoting the authorization reform of the board of directors, exploring the governance mechanism of companies with SOE investments and exploring the new public ownership under the combination of labor and capital.

Posted in: ECONOMY

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