By Xiang Anbo, Research Team on “State-Owned Capital Investing and Operating Companies”, Enterprise Research Institute, DRC

Research Report, No. 44, 2020 (Total 5788) 2020-3-19

Abstract: To bring the substantive role of the state-owned capital investing and operating platforms into full play, the "two types of companies", that is state-owned capital investment companies and state-owned capital operation companies, need to change their mindset first. The practice "group management and control" based on the concept of parent-subsidiary companies should be abandoned, and the idea of "corporate governance" based on equal legal person property rights should be strengthened. The concept of the "business system" of industrial enterprises should be given up, and the awareness of "portfolio" of investment return and risk prevention and control should be emphasized. These two types of companies have to go through a comprehensive organizational transformation in functional reshaping, business line adjustment and organizational restructuring. At the same time, in order to perform their duties and exercise their designated rights, the shareholders of the "two types of companies" need to improve the following abilities: the ability to manage capital, protect shareholders' rights and coordinate with shareholders, the ability to build systems and "serve the national strategy with market mechanisms", the ability for strategic guidance and performance assessment, and the ability for comprehensive risk prevention and control. To realize the transformation, systematical support should be provided for their comprehensive reform; employees should be offered good terms and basic working environment to bring out their initiatives; the relationship between the government and enterprises should be improved, and enough room should be provided for the two types of companies to play a substantial role.

Key words: two types of companies, transformation, ability improvement