Profits, not political connections, will decide who is promoted, says official
Directors of state-owned companies will be given more powers over the next three years to improve corporate supervision and prevent corruption and mismanagement.
Li Rongrong, head of the State-owned Assets Supervision and Administration Commission, said: 'SOEs must be run as corporations and not government agencies.
'That means shareholders must exercise their supervisory powers and that these corporations must abide by board supervision.'
He made the comments in an interview with the Communist Party magazine Study Times.
The commission was founded in March after President Hu Jintao and Premier Wen Jiabao took office. It has been overseeing the merger of large SOEs into 196 main groups and beginning the sell-off of the remaining 150,000-plus small and medium-sized SOEs in the provinces.
Among the expected reforms, executives will be made responsible for their companies' profit margins. Those who earn profits will be promoted, while those who do not will either be demoted or removed.
