A Study On Improving The Efficiency Of Board Governance In State-owned Enterprises

Board governance is the core of modern corporation management. In recent years, a large number of researches have been carried out on the efficiency of board governance in state-owned enterprises from the perspectives of practice as well as theory. Though these have accumulated a lot of experiences, there are still problems to be solved in board governance of state-owned enterprises. In particular, with the establishment of the new system of state assets supervision and administration, there are four levels of supervision and administration—the State-owned Assets Supervision and Administration Commission, the assets provider, the board of directors and its affiliated committees, the supervision board and the top management body headed by the general manager. This has brought new changes to the board governance of state-owned enterprises. How to enhance the establishment of board governance and improve its efficiency has thus become an important topic for discussion in theory as well as practice.This paper, adopting the theoretical analysis method, the comparative studies method and the demonstration analysis method, has reviewed the origin and development of board governance system and the relevant studies on board governance efficiency both at home and abroad, analyzed the status quo and problems in board governance of enterprises in Shandong Province, and has made a study on the approaches and measures to boost the efficiency of board governance in state-owned enterprises.Based on the present situation in board governance in state-owned enterprises in China, this author, adopting the theoretical and practice findings at home and abroad, believes that the key point in strengthening the establishment of board governance in state-owned enterprises in China should be the fulfillment of the duty and rights of the board of directors, the introduction of external directors and the standardization of the function of board of directors. The fulfillment and the accurate definition of the duty and rights of the board of directors according to law is the prerequisite for the improvement of efficiency in board governance of state-owned enterprises. The introduction of external directors is the important guarantee in advancing the independence of the board of directors and actually implementing the balance between decision-making and execution. The standardization of the function of the board of directors is the sticking point in improving the efficiency of the board governance. From the actual practice in state-owned enterprises in Shandong Province, the standardization and systematization of the establishment of board governance should be carried out as soon as possible. A sound system of board of directors should be established in the earliest possible time. The independence of the board of directors should be consolidated and the external directors should be pertinently introduced. The size and structure of the board of directors should be properly decided and the function of the board of directors should be optimized. The construction of the sub-committee of the board should be strengthened and the the decision of the board of directors should be made on a scientific bases. The function of the board of directors should be enhanced and the supervision and decision-making of the board should be perfected. The relationship between the board of directors, the CPC Party committee, the managers should be straightened out to ensure that each section performs well its own duty.The originality of the paper lies in that the author, based on an in-depth analysis of the present situation of board governance in province-governed enterprises in Shandong, adopting the theory and practice in board governance at home and abroad, has put forward the new way of establishing board governance in state-owned enterprises under the new system of state assets supervision and administration to promote the practice of board governance in state-owned enterprises from the aspects of the reinforcement of establishing the system of board governance, the consolidation of the independence of the board of directors, the optimization of the function of the board of directors and the straightening of the internal and external relations of the board of directors.