Party-building key to modern firms: official

Many State-owned enterprises (SOEs) that are dual-listed or listed in multiple markets must further strengthen their efforts on communication and explanatory work to gain more recognition and support over the matter of putting the Party construction clauses in writing in company articles, a senior official at the country’s securities market watchdog said.

“Putting contents on the Communist Party of China’s (Party) construction into company’s articles of association is an important step for the fusion of the leadership of the Party into corporate governance and efforts in building a modern enterprise system with Chinese characteristics,” said Yan Qingmin, vice-chairman of the China Securities Regulatory Commission, at a recent industry meeting, according to zhonghongwang.com on Thursday.

“Listed companies should, in accordance with relevant laws and regulations, highly value the building up of Party organizations and make full use of their role,” Yan said.

Huang Hualin, secretary of the board of equipment manufacturer Liugong Machinery Co in South China’s Guangxi Zhuang Autonomous Region, told the Global Times that the company put the contents in writing in April 2018 at the direction of the State assets and securities regulators.

Huang said that when the amendment, which puts clauses on Party building to the company’s articles of association, was passed with overwhelming majority, there had been some opposition from stakeholders, mostly Qualified Foreign Institutional Investors, but there had been no selling of stakes by them after the amendment passed.

“Thanks to its deep-rooted Party building work, Liugong has never experienced corruption cases in its company management and even mid-level managers, indicating the importance Party building has to modern corporations,” Huang said.

“Now, communications and explanatory work will be focused on how to convince [people that] the new authority is in line with the interests of stakeholders and that there is a mechanism in place to guarantee that such interests are aligned,” Zheng Zhigang, a company law expert at Renmin University of China, told the Global Times.