Discussion On Outside Director System In Exclusively State-owned Companies

Establishing outside director system in wholly state-owned companies can improve the structure of the board of directors in wholly state-owned companies, enhance the corporate governance, and solve the problems raised from "management is fully controlled by internal personnel". As one of the reforms of board of directors, independent director system is originally from the U.S. and has been widely applied in Anglo-American countries. Based on the separation of ownership and operational rights, the system is an effective measure to make up the insufficiencies of existing corporate governance structure, in order to control and balance the rights of directors and managers. The history and development of the system are providing material theories and experience to establish outside director system in wholly state-owned companies in China. This article is trying to discuss relevant issues regarding establishing outside director system in wholly state-owned companies, by comparison and historical study of theories and practices of the system.The article starts from the summary of outside director system in wholly state-owned companies. It elaborates the background of outside director system, current governing laws and regulations, and its history. In addition this part of the article analyzes the relationships between outside director system and independent director system in wholly state-owned companies. Outside director system in wholly state-owned companies was...