Six major SOEs to set up board of directors

A top Chinese official who oversees state assets said Friday six major state-owned enterprises (SOEs) will set up board of directors within the year on a trial basis to improve their governance structure.

Shanghai Baosteel, China Chengtong Group and China Railcom are among the six to implement the trial to have their own board of directors, said Li Rongrong, director of the State-owned Assets Supervision and Administration Commission (SASAC).

Setting up board of directors is a major prerequisite for smooth trading of state-owned equity, said Li, who emphasized thatsuch move is SASAC's "top priority".

A set of corporate regulations will be worked out as the trial progresses and the number of SOEs to take part in the program may increase, he said.

At present, 90 percent of the 189 major SOEs supervised by the SASAC are wholly state-owned and most of them adopt a general-manager-responsibility system without a board of directors.

In order to improve these companies' management structure, Li said, the SASAC will take measures to diversify shareholders by facilitating cross-shareholding among SOEs and corporate restructuring.

28 major SOEs including some in real estate and tourism sectors are engaged in talks of equity swap and the number of major SOEs will likely fall to 185 by the end of the year, he said.

Source: Xinhua