State Grid Completed Company Restructure on Time
Finishing the Transition from an Industrial Enterprise Owned by the Whole People to an Enterprise Wholly Owned by the State
State Grid received the new company license from the industry and commerce authorities on 30th November, marking the completion of company restructure of the corporate headquarter. State Grid restructured from an industrial enterprise owned by the whole people to an enterprise wholly owned by the state according to the arrangement of State-owned Assets Supervision and Administration Commission of the State Council and the Company Law of the People¡¯s Republic of China. The name of the company also changed from State Grid Corporation of China to State Grid China Co., Ltd. So far, the restructure of the headquarter, 21 secondary companies and 123 tertiary subsidiaries has been completed ahead of time. The restructure marks a new stage for State Grid in deepening reforms.

Carrying out the company restructure of state-owned enterprises is a major strategic decision of the Central Party Committee and the State Council. It is an important part of deepening state-owned enterprise reforms, a far-reaching exploration in improving corporate governance and a prerequisite of speeding up the formation of an effective and balanced corporate governance structure and a flexible and efficient market mechanism. The restructure allows state-owned enterprises to become truly independent market entities and thus brings about vigor and vitality and new drivers for growth, laying a solid foundation for State Grid to realize the goal of becoming a world-class grid and a world-class company and the transition to a modern corporate governance model. It also helps to integrate the leadership of the Party with the improvement of corporate governance to accelerate the formation of a governance mechanism with different parties fulfilling their own responsibilities in a coordinated, balanced and efficient manner.

From early this years, State Grid has been carefully implementing the decision of the Central Party Committee and the State Council to make detailed plans for the restructure and steadily pushed forward related work according to the requirement of the State-owned Assets Supervision and Administration Commission of the State Council and the Corporate Party Committee. With these efforts, the restructure was able to be completed on time. The Corporate Party Committee attached great importance to the restructure and held two meetings to review related proposals. State Grid Chairman Shu Yinbiao made several important instructions, requiring the strengthening of overarching design and coordination with the improvement of corporate governance as the ultimate goal. A special work team was established with State Grid President Kou Wei as the team leader and EVP Wang Min as the deputy leader of the team. Subsidiaries of all levels also established related offices and work teams to carry out the structure plan with the people in charge being held accountable for the work. State Grid organized several meetings to coordinate, study and solve major issues in the process of restructure to ensure that different departments shoulder their own responsibilities, carrying out their own duties and cooperate closely for coordinated action. 

State Grid made early plans and started the research on the procedures of restructure, tax policies and land allocation late last year with related reports being worked out. Early this year, State Grid made a thorough review of all subsidiaries owned by the whole people and started the compilation of the Corporate Restructure Plan to identify deadlines and tasks for the headquarter and related subsidiaries. The company imposed strict control over the procedures of restructure, carefully implemented the Plan for the Company Restructure of Central Enterprises and followed the procedure of making decisions through collective discussion for major events, the appointment and dismiss of major leaders, the implementation of major projects and the use of large sums of money. Besides, State Grid also brought in a third party for assessment and evaluation to ensure law-based restructure and compliance. It organized preliminary review and collective review of the restructure proposal of each subsidiary with detailed analysis of all materials and provided legal documents such as shareholders¡¯ decisions to ensure the early completion of the restructure. In the process, State Grid adopted a project-based approach, issued milestone plans for every stage of the restructure, strictly controlled deadlines and clarified the duties and responsibilities and tasks for each person and each day. The company also conducted policy research and launched Q&A of Company Restructure that explains 53 hotspot issues concerning the restructure. A weekly report mechanism was also established with 11 monthly and bi-weekly reports being released to share the experience of related subsidiaries in pushing forward the work. Moreover, State Grid also took efforts to improve the corporate governance structure of all subsidiaries, revise corporate charter, compile and approve draft corporate charters of subsidiaries and design the governance model of secondary subsidiaries in a scientific manner.

With the concerted efforts of the company, subsidiaries of all levels owned by the whole people finished the restructure on time, organized the board of directors and the board of supervisors, appointed members of the board of directors and the board of supervisors and other senior executive officers and revised decision-making procedures. By now, a balanced and efficient corporate governance system has been initially established.

Source: State Grid Department of Legal Affairs, State Grid News
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