Corporate Governance of China’s State-Owned Enterprises: A Review of Past Experiences

Abstract

This study aimed to evaluate the strengths and weaknesses of corporate governance practices in China's state-owned enterprises (SOEs) based on their current state. The researchers selected 20 SOEs and surveyed 40 respondents to assess five key areas: institutional framework, information disclosure, board and supervisory board responsibility and supervision, legal guarantees for stakeholder interests, and strategic management. The findings revealed that while the interviewees generally agreed with the current state of SOE corporate governance, there were areas for improvement in all five assessed areas. Environmental, Social, and Governance (ESG) and sustainability issues were the most concerning for the respondents, whereas shareholder relations were of least concern. Regarding the impact on productivity and profitability, the sample companies exhibited average performance, suggesting room for improvement. The study recommended several optimizations to the corporate governance system, including strengthening the board of directors' authority, establishing information disclosure and stakeholder protection mechanisms, reforming the SOE supervision system, and implementing a mixed ownership structure for SOEs.