Advantages and Disadvantages of State Grid Corporation's Governance Model

Group control is more optimized. State Grid insists on optimizing and perfecting the state-owned assets supervision system in practice, and the characteristics of specialization, systematization and rule of law of state-owned assets supervision are increasingly prominent, which is more suitable for strengthening state-owned assets supervision with the focus on managing capital. The company establishes and optimizes the "strategy+"management and control mode, implements "strategy+operation" management and control on power grid business, optimizes resource allocation, promotes professional management and improves market responsiveness; Implement "strategy+finance" control over market-oriented industries, finance and international business to improve capital operation efficiency and value creation ability. Combined with the optimization of "strategy+"management and control mode, the company strives to build a strong headquarters with "five strong and three excellent", optimizes the division of responsibilities, strengthens the "general management of headquarters", and gives full play to the group management and control role of headquarters in formulating strategy, coordinating resources, professional cooperation, assessment and incentive, and preventing risks. The "Strategy+"model adheres to the basic principles of strategic orientation, differentiated management and control, management empowerment and steady progress, and is conducive to strategic implementation and improving operational efficiency, constantly stimulating the enthusiasm, initiative and creativity of all levels and guiding the company to achieve results under the new management and control model.

Empowering management can stimulate the dynamic vitality of enterprises. The company firmly grasps the general tone of empowering management and delegating power to grass-roots units, clearly defines the management interface between headquarters and grass-roots units, reasonably determines the relationship between responsibilities and rights, and effectively stimulates the vitality of all levels. We will comprehensively promote the reform of "simplifying administration and decentralizing power, strengthening supervision and improving services", further decentralize some management authority in accordance with the principle of realizing the legal person property rights and operational autonomy of all units, and enhance the autonomy of all units in the fields of institutional setup, selection and employment, comprehensive planning and budget arrangement, capital asset management, bidding and procurement, and marketing services. At present, the company has delegated four batches of 286 items of "simplifying administration and decentralization, strengthening supervision and improving services", speeding up the transformation of functions and fully authorizing decentralization. While increasing management capabilities, the company also pays attention to differentiated management, implements classified accounting and classified assessment, further highlights local conditions and precise policies, and provides hierarchical guidance for different units; Improve the overall mechanism of performance appraisal, organically combine the assessment results with enterprise salary distribution and the use of leaders, and realize closed-loop management.

▲ State Grid Jiangsu Electric Power Organization's top financial professionals conduct multidimensional data visualization and application analysis.

Strengthen compliance management and prevent and resolve various risks. Make overall plans for development and safety, formulate and promulgate the Measures for the Management of Comprehensive Risk Management and Internal Control of State Grid Corporation, and promulgate 38 measures to comprehensively strengthen safety responsibility, strengthen compliance management, improve information disclosure system, improve supervision and management system, strengthen the prevention of debt and financial risks, investment risks and legal risks, and steadily advance various reform and development tasks to ensure that enterprises operate according to law and compliance. In order to improve the ability of risk identification and prevention, the company has built a digital enterprise construction platform based on the rule of law, strengthened system monitoring and risk early warning around important areas and key links such as decision-making, bidding and procurement, contract signing and performance, timely found potential risks, provided accurate and detailed legal basis for the company's rules and regulations and contract templates, ensured the unification of "external laws" and "internal regulations", effectively realized the online identification, analysis, evaluation and prevention and control of legal compliance risks, and built a brand new one.