PetroChina’s introduction of the board of directors’ central government reform is still difficult

PetroChina recently announced that Jiang Jiemin has served as chairman and party secretary of China National Petroleum Corporation and was removed from its position as general manager; Zhou Jiping, former deputy general manager and member of the Party Group of CNPC, took over as general manager and served as a director. The above personnel changes were made at the enlarged meeting of the CNPC Group Party Group held on the 4th.
Zhou Xiujie, a research fellow in the energy industry at China Investment Advisors, said that the establishment of a board of directors system is of positive significance for improving the internal management of PetroChina. As early as this year's personnel changes in April, Sinopec and CNOOC each set up a board of directors, which achieved the restructuring of the chairman and general manager. The promotion of the establishment of a board of directors by state-owned enterprises is also a policy actively promoted by the SASAC in recent years. In 2005, the State-owned Assets Supervision and Administration Commission initiated the pilot reform of the first batch of central government board of directors in seven companies including Baotou Iron & Steel, and the scope of the pilots continued to expand. By 2009, the SASAC issued the "Interim Measures for the Board of Directors to Standardize the Operation of the Board of Directors of Central Enterprises", which clearly stipulated that the chairman and general manager of the central company should be established in principle.
At present, many central SOEs have unclear boundaries between decision-making and management, which has a certain negative impact on the company's development. For PetroChina, the establishment of a board of directors in a group company means that it will be further transformed into a modern enterprise system, which is conducive to the establishment of a clear and reasonable internal corporate structure. The introduction of the board of directors system is an attempt by oil and gas central government to explore modern management systems, but there is still a long way to go before the decision-makers and management are completely separated.
Zhang Zhenlin, research director of China Investment Consulting, pointed out that the central issue of the reform of the board of directors of the central government is to allow the board to have the right to hire and dismiss the head of the company. If this problem is difficult to break through, the state-owned enterprise reform will be difficult to continue. Although the company law clearly stipulates that the board of directors has such rights, the heads of state-owned enterprises are still appointed by the SASAC and have a strong administrative background. Regarding the orientation of the governance structure of state-owned enterprises for a long period of time, there is no conclusive conclusion. At present, although the introduction of the board of directors of central SOEs has been implemented initially and the scope has continued to expand, there is no solution to the issue of the authority of the board of directors in the short term.
The "investment analysis and prospects forecast report for China's oil and gas exploration industry in 2011-2015" issued by the China Investment Advisor shows that as of 2010, 30 of the nearly 120 central SOEs have established a board of directors system. For the reform of the petroleum system, it is of great significance to introduce a board of directors system and establish a sound corporate governance system. Whether it is from the establishment of a fair, fair, open oil market, or from the perspective of improving the internal governance of oil and gas companies, the introduction of the board of directors system is very necessary.

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