Baosteel Group: Governance with Chinese Characteristics
Posted: 4 Nov 2009
Date Written: March 12, 2009
The new outsider-dominated board of directors of China's state-owned Baosteel Group must decide whether to modify the Group's structure. With the completion of a pending acquisition, the Group will control four publicly listed steel-producing subsidiaries, and board members are concerned about competition among the subsidiaries and about the subsidiaries' public shareholders. Selected by the Chinese government as the first company to take part in a pilot project on corporate governance in state-owned enterprises, Baosteel and its board are under intense scrutiny by Chinese and overseas investors in the listed subsidiaries as well as by China's political leadership and the media. The case provides background on Baosteel, China's SOE reform, the Chinese government's pilot project on corporate governance, and the functioning of Baosteel's newly constituted board of directors.
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