On May 3, the State Council issued a circular to improve the legal personnel management structure and modern corporate system of State-owned enterprises.
SOEs’ corporate reform will be completed by the end of 2017, according to the State Council.
The role of articles of association will be strengthened in enterprise management. Boards of directors with a majority of external directors will be established in wholly State-owned enterprises, and the system of dispatching external directors will be set up in State holding enterprises.
The efforts are aimed at turning State-owned enterprises into market entities, which are independently responsible for their management, gains and losses, risks, self-discipline, and development, according to the circular.
On the basis of laws and regulations, as well as the articles of association, efforts will be made to strengthen rights and liabilities of investor organizations, boards of shareholders, boards of directors, managers, boards of supervisors, party organizations, and congress of workers and staff members.
As the authority in SOEs, boards of shareholders have the responsibility to approve annual work reports from the boards of directors and boards of supervisors, as well as company budgets and profit distribution.
Wholly State-owned enterprises will enhance independence and authority of the boards of directors, which have the rights to major company policies, staff selection and employment, and salary distribution.
Chairmen of the boards of directors at wholly State-owned enterprises have the primary responsibility regarding enterprise reform and obligation to report on major management problems and risks to boards of directors and State-owned shareholders.
For State holding enterprises, directors sent by State-owned shareholders should proactively safeguard national capital interests, according to the circular.
The decision-making system of boards of directors featuring group deliberation, independent voting, and individual responsibility will be promoted, and an appraisal system concerning the performance of the boards of directors will be improved.
The system of professional managers will be promoted by training more qualified managers and improving their salary system.
In addition, efforts will be made to enhance independence and authority of the boards of supervisors.