It is also imperative to implement the guidelines of the 15th CPC Congress in an active manner, improve and standardize the system of the board of supervisors so that supervision over state-owned enterprises will be intensified, and state assets and its legitimate rights should not be infringed upon. The corporate system is an effective organizational form of the modern enterprise system. The practice of using corporate legal persons is the core of the corporate system. It is necessary to clarify the duty of councils of share-holders, the board of directors, the board of supervisors and managerial ranks. Also, a system for harnessing corporate legal persons should be formed, and should specify that each legal person is responsible for his own work, and for harmonious operations combined with effective restrictions.
Owners have the ultimate power of control over enterprises.
The board of directors should safeguard the rights and interests of capital contributors, and should be responsible for the council of share-holders. The board of directors makes decisions regarding development goals and major operation activities of the company, employs business operators, and evaluates the work of the operators. It is imperative to bring into full play the supervisory role of the council of supervisors over financial affairs, directors and operators of the enterprise. Leading Party members inside the boards of directors, supervisors, managerial ranks and trade unions can join the Party committee according to the Party Constitution and relevant rules. The Party secretary and chairman of the board of directors can be the same person, but in principle, the chairman of the board and general manager should be two separate posts.