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Suggestions on Selecting and Engaging Managers of Market-Oriented State-Owned Enterprises(No.112, 2016)


By Xiang Anbo, Enterprise Research Institute, DRC

Research Report, No.112, 2016 (Total 4995) 2016-8-29

Abstract: The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has chosen four state-owned enterprises (SOEs) for pilot practice in selecting and engaging managers in light of market performance. The results show that the selection and engagement of managers based on contract management for market-oriented SOEs could better meet the demand for symmetric relations between responsibilities, power and interests. The pilot practice has initially found out the key elements for the establishment of the system of professional managers, and aroused the managers’ working enthusiasm. The practice is of practical significance for SOEs to become adaptable to economic development in the new normal, and to address the problems relating to brain drain and insufficient vigor. However, it also has some deficiencies like low marketization degree and limited number of enterprises to be included in the pilot practice. It is suggested that the power of board of directors be further fleshed out, the standard of selecting and engaging managers be improved, the system of benefit packages for enterprise executives be perfected, the responsibilities, power and interests at the management level be enhanced, the number of qualified directors be increased, and more measures for the selection and engagement of managers at the management level be introduced. It is hoped that the pilot practice could be pushed forward in scope and depth and compatible with market rules and some experience could be summed up to make good reference to future practice.

Key words: market-based selection and engagement, professional managers, state-owned enterprises’ reform