More power needed for state capital representatives

New Minister of Finance Nguyen Van Thang said that there should be a management and evaluation mechanism as well as a remuneration regime for representatives of State capital in enterprises.

Discussing at the hall on the afternoon of November 29 about the Law on Management and Use of State Capital Invested in Enterprises, delegate Hoang Van Cuong - National Assembly Delegation of Hanoi - said that state-owned enterprises currently hold a large amount of capital and assets but operate inactively. The efficiency they bring is lower than that of private enterprises.

The reason is that the management mechanism is overlapping, binding and rigid, so responsibilities are not clearly defined.

With the principle that when there is state investment, there must also be a mechanism to monitor and manage the capital there, Mr. Cuong said that it is necessary to expand the scope of regulation and the subjects of application of the law.

Delegate Hoang Van Cuong - National Assembly Delegation of Hanoi City

Delegate Trinh Xuan An - National Assembly Delegation of Dong Nai Province - said that with the goal of "unleashing" and creating maximum conditions for state-owned enterprises, administrative regulations should be reviewed and reduced. Accordingly, it is necessary to increase the autonomy and self-determination of the board of members, associated with innovation of the model of capital ownership representation to be "more revolutionary".

Currently, many national corporations such as national oil and gas, national airlines, etc. are also classified together with other enterprises without criteria for leading and core enterprises. Therefore, legal regulations need to have this criterion to distinguish core enterprises to promote their role.

Explaining at the end of the discussion session, new Minister of Finance Nguyen Van Thang agreed with the view that more power should be given to representatives of State capital, because they play a decisive role in the business performance of enterprises.

Minister Nguyen Van Thang acknowledged that the salary and bonus regime for capital representatives at State-owned enterprises has long been a difficult and challenging issue. In this amendment to the law, many conditions and responsibilities have been assigned to capital representatives.

The representative of state capital in an enterprise plays an important role, deciding the business efficiency as well as the preservation and development of the enterprise. Therefore, there needs to be a management and evaluation mechanism, associated with appropriate remuneration.

According to Minister Nguyen Van Thang, the capital representative also needs to have enough authority in leadership and direction. If it is accepted as a private enterprise, there must be a mechanism, especially the salary and bonus regime for the capital representative.

"If we introduce a strict mechanism, representatives who are already working very hard but have salaries and bonuses based on a scale will never have talented people. And even talented people will not work to their full potential," said Minister Nguyen Van Thang.

End administrative intervention in business investment

According to the Minister of Finance, it is necessary to end intervention by administrative orders in business investment and enterprise operations, ensuring operations in accordance with market principles.

According to the report, there are currently 676 enterprises with State capital, 70% of which are 100% owned by the State. The total assets of State enterprises are more than 3.8 quadrillion VND, with a total capital of 1.8 quadrillion VND, as of the end of 2023.

Regarding the proposal to expand the scope of enterprises with 50% state capital or less, Minister Nguyen Van Thang said that he will study and accept it to report to the Government, and supplement it to the draft as appropriate. At the same time, the drafting agency will also study regulations on development strategies and plans, avoiding creating barriers for enterprises.

Regarding profit distribution, Minister Nguyen Van Thang said that it is necessary to implement on the principle of equality among participating shareholders, not to set it too high, which would be inappropriate.

Source: https://phunuvietnam.vn/minister-of-finance-can-trao-quyen-nhieu-hon-cho-nguoi-dai-dien-von-nha-nuoc-20241129191820718.htm