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Establish a Supervisory System for State-Owned Enterprises Integrating Discipline Inspection and Supervision with the Supervisory Boards (No.24, 2019)


By Bi Gexin & Wang Jicheng, Research Team on “State-Owned Enterprises Supervisory Institutional Mechanism with Chinese Characteristics in the New Era”, Commission for Discipline Inspection, DRC

Research Report, No.24, 2019 (Total 5524) 2019-3-4

Abstract: The discipline inspection and supervision work of state-owned enterprises urgently need to form a joint force. Currently, in terms of the collaborative supervision between the departments of discipline inspection and the supervisory board of state-owned enterprises, the supervisory board failed to play its due role stipulated in the Company Law of the People’s Republic of China (hereinafter referred to as the Company Law), and it is also hard for the discipline inspection and supervision committee of state-owned enterprises to effectively supervise entities at the same level. In practice, some governments have tried on the measure of sending the secretary of the discipline inspection committee to serve concurrently as the chairman of the supervisory board of the state-owned enterprise. In this way, the synergy between the supervisory board and the discipline inspection committee can be more sufficient, the law-based supervision of the supervisory board more independent, and accountability and supervision more integrated. This mechanism covers all aspects of corporate operation and management, gives full play to the complementary advantages between the discipline inspection committee and the supervisory board and thus produces satisfying results. It is suggested that governments of all levels should take the opportunity to share the experience of Shenzhen based on the reform of sending certain officials of the Central Commission for Discipline Inspection and the National Supervisory Commission to state-owned enterprises as the Chairman of the supervisory board. Besides, it is also advisable to assign the group leader of discipline inspection and supervision as the Chairman of the supervisory board. In the new round of revision of The Company Law, instead of canceling the supervisory board in the corporate management structure , the independence of the supervisory board need to be strengthened and the system of the supervisory board need to be reformed regarding its function and positioning.

Key words: discipline inspection and supervision, supervisory board, joint supervision