Research On Operational Mechanism For External Board Of Supervisors In State-owned Enterprises

Since the out-side supervision system of state-owned enterprises (SOEs) was established 15 years ago, the external board of supervisors seriously performed their duties, highlighted their supervision focus, making positive contributions to safeguarding the rights and interests of the investor, preventing the loss of State-owned assets, promoting the development of SOE reform, and increasing the value of State-owned assets. During the practice, however, the out-side supervision system meets some inevitable critical problems needed to be urgently resolved, along with the deepening of the corporatization and joint-stock system reform in SOEs, the emerging situation of shareholder diversification, the rapid development of mixed-ownership economy, and the improvement of corporate governance. The purpose of this article is just to tackle with the problems currently faced by the external board of supervisors in their operation, seeking for a better operational mechanism for the external board of supervisors, which can match the change of SOE development and State-owned assets management system reform,better protect the rights of investor, and can contribute more to the increase in the value of State-owned assets as well as the promotion of SOE reform and development.This article adopts the normative research method. Based on a lot of literature analysis and in-depth interviews with experts, the author combines the theory with practice, intending to resolve tangible problems with enterprise managerial theories and tools. The article starts form the research on the out-side supervision system, analyzing the current operation mechanism of external board of supervisors and studying its overall frame and three sub-systems, points out its main problems, then analyzed the possibility and necessity of the improvement on the External Supervisory Panel System, raises up the improve target and principle, studies the accessory methods in terms of regulation, organization and personnel, which are needed by the improved external supervisory panel operation mechanism, and makes the conclusion that we must stick to the out-side supervision system and we should constantly improve it.