Chương 4 Luật doanh nghiệp nhà nước 2003: Tổ chức quản lý công ty nhà nước

Chapter IV

STATE COMPANY-MANAGING ORGANIZATIONS

Article 21.- Models of State company-managing organizations

1. The State companies are organized and managed after the model of having or having no Managing Boards. The following State corporations and independent State companies shall have Managing Boards:

a) Corporations with investment and establishment decided by the State;

b) Corporation making investment with, and dealing in, the State capital;

c) Independent State companies with large capital, holding dominant powers over other enterprises.

2. Based on the characteristics and sizes of State companies, the persons who decide the establishment of the companies shall decide on the organizational and managerial structures of the companies defined in Clause 1 of this Article.

Section 1. STATE COMPANIES HAVING NO MANAGING BOARDS

Article 22.- Managerial organizations of the State companies having no Managing Board

State companies having no Managing Boards shall each have a managerial structure comprising the director, deputy-directors, chief accountant and assisting apparatus.

Article 23.- Directors, deputy-directors, chief accountants and assisting apparatuses

1. Directors are the companies’ administrators and representatives at law and take responsibility before the persons who appoint them, the persons who sign contracts to hire them and before law for the performance of assigned tasks and delegated powers.

2. Deputy-directors shall assist their directors in administering the companies under the directors’ assignment and authorization, be answerable to the directors and law for the assigned or authorized tasks.

3. The chief accountants shall have the tasks to organize the book-keeping work of the companies; assist the directors in supervising the finance at the companies according to legislation on finance, accountancy; take responsibility before the directors and law for their assigned or authorized tasks.

4. The companies’ offices, bureaus, professional boards shall function to advise and assist the directors, deputy-directors in managing and administering affairs.

Article 24.- Criteria and conditions for selection of directors

1. Criteria and conditions for selection of directors

a) Having capability for business and organization of management of the companies; having university degree, having profession in the main business domains of the companies; having at least three years’ experiences in managing and/or administering enterprises in the main production and business lines of the companies;

b) Having good health, good moral quality, being honest and not self-seeking; having knowledge about law and sense of law observance; having permanent residence in Vietnam.

2. The following subjects shall not be selected for appointment to be, or signing contracts to act as, directors:

a) Persons who once acted as directors of State companies, but breached the disciplines and were demoted, removed from position, or who let the companies fall into the state prescribed at Point a, Clause 3, Article 25 of this Law;

b) Persons who are banned from assuming posts of managing or administering enterprises as provided for by law.

Article 25.- Selection, appointment and dismissal of, signing and, termination of contracts with, directors, deputy-directors, chief accountants

1. Persons who decide on the establishment of companies shall decide on the selection for appointment and the dismissal of, the signing and termination of contracts with, directors of State companies; decide on the appointment and dismissal of, the signing and termination of contracts with, deputy-directors and chief accountants of the State companies at the proposals of the directors.

2. The procedures for selection and appointment of, the signing of contracts with directors shall comply with the Prime Minister’s regulations. Directors shall be appointed or sign contracts for a duration of not more than five years and may be re-appointed or renew their contracts.

3. Directors shall be subject to removal from office or termination of contracts ahead of time in the following cases:

a) They have let the companies suffer from losses for two consecutive years or fail to achieve the ratio of profits to the State’s investment capital for two consecutive years or fall into the irremediable state of interwoven losses and profits, except for cases of loss or reduction of ratio of profits to the State’s investment capital, which have been approved by competent authorities; losses or reduction of ratio of profit to the State’s investment capital with objective reasons explained and approved by competent State bodies; investment in expansion of production, technological renewal;

b) The companies fall into the state of bankruptcy, but they fail to submit applications for bankruptcy;

c) They fail to fulfill the tasks or norms assigned by the persons who have appointed or selected them or fail to fulfill their contractual obligations;

d) They are dishonest in performing their tasks and exercising their powers or abuse their positions and powers to seek profits for themselves or for other persons; untruthfully report on the financial situation of the companies;

e) They are sentenced by courts with legally effective judgements or decisions;

f) They have lost their civil act capacity or have restricted civil act capacity.

4. The directors shall be replaced in the following cases:

a) They apply for resignation;

b) They are transferred to, or arranged with, other jobs under decisions.

Article 26.- Tasks and powers of the directors

The directors shall have the following tasks and powers:

1. To receive and efficiently use the capital invested by the State and assets, land, natural resources as well as other resources assigned, lent or leased by the State;

2. To formulate development strategies and long-term plans of the companies, projects for investment, joint-ventures as well as schemes on managerial organizations of the companies for submission to the persons who decide the establishment of the companies;

3. To decide on investment projects, contracts on sale of assets valued at up to 30% of the total remaining assets on the companies’ accounting books or smaller the percentages prescribed at the companies’ charters; borrowing, lending, renting or leasing contracts and other economic contracts prescribed by the companies’ charters, but not exceeding the companies’ charter capital;

4. To administer the companies’ operation; to organize the realization of development strategies, business plans, investment projects, decisions of owners as provided for in Articles 64, 65, 66 and 67 of this Law; to represent the companies in signing and directing the implementation of economic and civil contracts;

5. To promulgate techno-economic norms, product standards and wage unit prices applicable within the companies in accordance with the State’s regulations;

6. To submit to the persons who decide on the establishment of the companies the selection for appointment or the dismissal of, or the signing or termination of contracts with, commendation or discipline of deputy directors, chief accountants;

7. To report to the persons who decide on the establishment of the companies and the finance agencies on the business and operation results of the companies;

8. To decide the selection of, signing or termination of contracts with, or appointment, dismissal, commendation or discipline of section heads and/or deputy-heads as well as persons holding equivalent titles in the companies, representatives of the companies’ capital portions contributed at other enterprises; to decide on wages and allowances for laborers in the companies, including officials under their appointing competence;

9. To submit to the inspection and supervisions by competent State bodies according to law provisions;

10. To enjoy the annual wage regime. The wage and bonus levels shall correspond to efficiency of the companies’ operation, which are decided by the persons who decide the appointment or prescribed in the signed contracts. Wages shall be advanced monthly and settled annually. The annual bonus shall be calculated on the basis of annual business results of the companies, with a part thereof being paid at the year-end and the remainder paid after the conclusion of their terms; particularly, the term-end bonus shall be calculated on the basis of that year’s results and the growth results of the whole terms;

11. To perform other tasks and powers, which are prescribed in the companies’ charters.

Article 27.- Obligations and responsibilities of directors

1. To perform with honesty and responsibility the delegated powers and assigned tasks for the interests of the companies and the State; to organize the implementation of law at the companies.

2. Not to abuse their positions and powers, use the companies’ capital and assets to seek profits for themselves or other persons; not to disclose the companies’ secrets while assuming the responsibility of directors or within three years or other time limits prescribed by the companies’ charters after resigning from the director’s post.

3. To compensate for damage according to law provisions and the companies’ charters if breaching the companies’ charters, making decisions ultra vires, abusing their positions and powers, thus causing damage to the companies and the State.

4. When committing one of the following violations which are, however, not serious enough to be examined for penal liability, the directors shall not be entitled to bonuses, wage raising and shall be disciplined according to the seriousness of their violations:

a) Letting State companies suffer from losses;

b) Losing the State capital;

c) Deciding on inefficient investment projects, failing to recover investment capital;

d) Failing to ensure wages and other regimes for laborers in the companies according to the provisions of labor legislation;

e) Letting errors in capital and asset management, accounting and/or auditing regimes and other regimes prescribed by the State occur.

5. In case of letting the companies fall into the state prescribed at Point a, Clause 3, Article 25 of this Law, depending on the seriousness and consequences of their violations, they shall have their wages lowered and have to pay compensations according to law provisions.

6. When the companies fail to fully pay payable due debts and fail to fulfill other due material obligations,

a) They must report thereon to the persons who decide on the establishment of the companies and propose debt-repayment schemes;

b) Directors must not raise wages for, and deduct profits as bonus payment to, laborers and managerial officials;

c) They must bear personal responsibility for the damage caused to creditors by their failure to implement the regulations at Points a and b of this Clause;

d) They must propose measures to remedy the companies’ financial difficulties.

7. If their companies fall into the state of bankruptcy and they fail to submit the application for bankruptcy, the directors shall have to bear responsibility as provided for by law.

8. Those State companies subject to the reorganization, dissolution or ownership conversion but fail to carry out the procedures for reorganization, dissolution or ownership conversion, the companies’ directors shall be dismissed or have their contracts terminated ahead of time.

9. Directors may only hold managerial titles of limited liability companies, joint-stock companies or foreign-invested companies when they are nominated by State companies or competent organizations to be candidates for the managerial titles or designated to be the companies’ representatives regarding the capital portions contributed to such enterprises.

Wives or husbands, fathers, mothers, children, siblings of directors of the companies must not hold the title of chief accountant, cashier in the same companies. The companies’ economic, labor and/or civil contracts signed with the directors must be notified to the persons who appoint or sign contracts to hire the directors; where the persons who appoint or sign contracts to hire the directors detect that the contracts aim for self-seeking purposes and are not yet signed, they are entitled to request the directors not to sign such contracts; if such contracts were already signed, they shall be considered null and void, and the directors shall have to pay compensations for the damage caused to the companies and be handled according to law provisions.

Section 2. STATE COMPANIES HAVING MANAGING BOARDS

Article 28.- Managerial structures of State corporations, independent State companies having Managing Boards

The managerial structures of State corporations or independent State companies with Managing Boards shall each comprise the Managing Board, the Control Board, the general director, the deputy general directors, the chief accountant and the assisting apparatus.

Article 29.- The Managing Boards

The Managing Boards are the bodies directly representing the State owners at the State companies or independent State companies having Managing Boards, having the right to decide in the names of the companies on all matters related to the identification and achievement of the objectives, tasks and interests of the companies, except for matters falling under the owners’ competence and responsibilities decentralized to other agencies or organizations being owners’ representatives for implementation.

The Managing Boards must be accountable to the persons who decide on the establishment of State corporations, independent State companies having Managing Boards, to the appointers and law for all activities of the corporations, companies.

Article 30.- Tasks and powers of the Managing Boards

1. To receive, manage and efficiently use capital, land, natural resources and other resources, which are invested in the companies by the State-owner.

2. To decide on the following matters:

a) Strategies, long-term plans, annual business plans, production and business lines of the companies and enterprises where the companies own the entire charter capital;

b) Investment projects, capital contribution, purchase of shares of other companies, sale of the companies’ assets valued at up to 50% of the total remaining asset value on the companies’ accounting books or other lower percentages prescribed in the companies’ charters; borrowing, lending, renting, leasing or other economic contracts in excess of the companies’ charter capital levels; or assign the general directors to decide thereon;

c) Schemes on management organization, business organizations, payroll and the use of managerial apparatuses, regulations on management of the companies, plannings, labor training; the establishment of branches, representative offices of the companies; the approval of the charters of State-run one-member limited liability companies with the companies being owners thereof;

d) Selection, signing of contracts or appointment, dismissal, demotion and wage levels of general directors after such is approved by the persons who decide on the establishment of the companies; the selection, signing of contracts or appointment, dismissal, demotion and wage levels of deputy-general directors as well as chief accountants at the proposals of the general directors; the adoption of the appointment, dismissal, demotion and wage levels of directors and chief accountants of member companies and non-business units, where the companies own the entire charter capital, for decision by the general directors; the selection, appointment, dismissal, demotion and wage levels of the chairmen and members of the Managing Boards of State-run one-member limited liability companies where the companies own the entire charter capital; the designation of representatives of the companies’ capital portions at other enterprises;

e) The performance of powers and tasks of owners of limited liability companies, joint-stock companies where the companies are owners or co-owners; the reception of enterprises which voluntarily join the member companies of corporations;

f) Investment and adjustment of capital and other resources invested by the companies between member units and the companies where they own the entire charter capital of according to such companies charters;

g) Schemes on capital mobilization for business operation but without alteration of ownership form, or authorization of the general directors to decide thereon;

h) The adoption of annual financial statements of the companies; schemes on the use of after-tax profits or the handling of losses in the business process at the proposal of the general directors; the adoption of annual financial statements of independent cost-accounting member companies of the corporations;

i) The inspection, supervision over the general directors, directors of member units in the performance of their functions and tasks prescribed by this Law;

j) The use of the companies’ capital for investment in the establishment of member units where the companies own the entire charter capital which shall, however, not exceed the investment capital levels which fall under the deciding competence of the Managing Boards, prescribed at Point b, Clause 2 of this Article; the dissolution, ownership conversion of these units.

3. To propose the persons who decide on the establishment of the companies:

a) To approve or amend the charters of the companies;

b) To decide on investment projects beyond the extent of decentralization to the Managing Boards and capital mobilization schemes, which lead to change of company ownership;

c) To add, replace, dismiss, commend and/or reward, discipline members of the Managing Boards of the companies;

d) To decide on investment projects, capital contribution to, and/or purchase of shares of, other companies, sale of the companies’ assets valued at over 50% of the total asset values left on the companies’ accounting books or other smaller percentages prescribed in the companies’ charters;

e) To decide on the use of the companies’ capital for investment in the establishment of member units where the companies own the entire charter capital in excess of the investment capital levels, which fall under the deciding competence of the Managing Boards as provided for at Point b, Clause 2 of this Article; to propose to the company establishment deciders for decision the dissolution or ownership conversion of these units.

5. Other powers and tasks as provided for by law and the companies’ charter.

Article 31.- Criteria and conditions of the Managing Board members

The Managing Board members must fully satisfy the following criteria and conditions:

1. Being Vietnamese citizens permanently residing in Vietnam;

2. Having the university degree, managerial and business capability. The Managing Board chairmen must have at least three years’ experiences in management and administration of enterprises in the companies’ main production and business lines;

3. Having good health, good moral quality; being honest, incorruptible and knowledgeable; having good sense of law observance;

4. Not being the subjects banned from undertaking managerial and/or executive posts in the enterprises as provided for by law.

Article 32.- Membership structure, appointment, removal from duty and replacement of Managing Board members

1. A Managing Board is composed of chairman and other members. The Managing Boards comprise full-time members and possibly part-time members. The Managing Board chairmen and the Control Board heads must be the full-time members. The general directors may be Managing Board members. The number of Managing Board members shall not exceed 7, which shall be decided by the company establishment decides.

2. The chairmen and members of the Managing Boards shall be appointed, removed from duty or replaced, commended, disciplined by the persons who decide on the establishment of the companies. The term of office of the Managing Board members shall not exceed five years. Managing Board members can be re-appointed.

3. Managing Board members shall be removed from duty in the following cases:

a) Being sentenced by courts with judgements or decisions, which have already taken legal effect;

b) Being incapable, unqualified to perform the assigned jobs; losing civil act capacity or having their civil act capacity restricted;

c) Being dishonest in the performance of tasks or exercise of powers or abusing positions and/or powers to seek benefits for themselves or other persons; untruthfully reporting on the companies’ financial situation;

d) Violating the provisions at Point a, Clause 3, Article 25 of this Law.

4. The Managing Board members shall be replaced in the following cases:

a) They apply for resignation;

b) They are transferred to, or arranged with, other jobs under decisions.

Article 33.- The Managing Board chairmen

1. The Managing Board chairmen must not concurrently hold the post of general directors of the companies,

2. The Managing Board chairmen shall have the following powers and tasks:

a) To represent the Managing Boards in signing the reception of capital, land, natural resources and other resources invested in the companies by the State-owner; to manage the companies under the Managing Boards’ decisions;

b) To organize the research into development strategies, long-term plans, large-scale investment projects, organizational and staff renewal schemes for submission to the Managing Boards;

c) To work out programs and plans on operation of the Managing Boards; to decide on agenda and contents of meetings and documents in service of meetings; to convene and preside over meetings of the Managing Boards;

d) To sign on behalf of the Managing Boards resolutions, decisions of the Managing Boards;

e) To organize the monitoring and supervision of the implementation of resolutions and decisions of the Managing Boards; to suspend the general directors’ decisions which are contrary to resolutions and/or decisions of the Managing Boards;

f) Other powers decentralized or authorized by the Managing Boards or the persons who decide the establishment of the companies.

Article 34.- Working regime of the Managing Boards

1. The Managing Boards work according to the regime of collectivism; meet at least once a quarter to consider and decide on matters falling within the ambit of their tasks and powers; for issues requiring no discussion, the Managing Boards may gather written opinions of the members. The Managing Board may hold extraordinary meetings to settle urgent issues of the companies at the proposal of the Managing Board chairmen, general directors or over 50% of the total number of the Managing Board members.

2. The Managing Board chairmen or Managing Board members authorized by the Managing Board chairmen shall convene and preside over meetings of the Managing Boards.

3. Meetings or gatherings of Managing Board members’ opinions shall be valid when they are participated by at least two-thirds of the total number of the Managing Board members. The Managing Boards’ resolutions and decisions shall be effective when they are voted for by over 50% of the total number of the Managing Board members; in cases where the number of votes for and the number of votes against are equal, the side with the vote of the Managing Board chairman shall be decisive. The Managing Board members are entitled to reserve their opinions.

When discussing the companies’ affairs which are related to important issues of any localities, the Managing Boards shall invite representatives of the relevant local administrations to attend the meetings; in cases where they are related to the interests and obligations of laborers in the companies, the representatives of the trade unions in the companies must be invited to attend the meetings. The representatives of agencies and organizations, who are invited to attend meetings, may state their opinions but shall not participate in voting.

4. The contents of issues under discussion, the stated opinions, the voting results, the decisions adopted by the Managing Boards and conclusions of the meetings of the Managing Boards must be recorded in writing. The meetings’ chairpersons and secretaries must jointly bear responsibility for the accuracy and truthfulness of the minutes of the Managing Boards’ meetings. The resolutions and decisions of the Managing Boards are binding on the entire companies.

5. The Managing Board members are entitled to request the general directors, chief accountants and/or managerial officials in the companies to supply information and documents on the financial situation and/or operation of the companies according to the information regulations prescribed by the Managing Boards or according to the Managing Boards’ resolutions. The persons requested to supply information must promptly, fully and accurately supply information and/or documents at the requests of Managing Board members, except otherwise decided by the Managing Boards.

6. The expenses for operations of the Managing Boards, including wages, allowances and remuneration, shall be accounted into the companies’ expenses for enterprise management.

Article 35.- Regimes of wages, allowances, bonuses of full-time members and part-time members of the Managing Boards

1. The full-time members of the Managing Boards shall enjoy the regimes of annual wages and bonuses corresponding to the production and business results and efficiency of the companies.

The regime of payment and settlement of wages and bonuses for full-time members of the Managing Boards shall be the same as for the directors of the State companies prescribed in Clause 10, Article 26 of this Law.

2. The part-time members of the Managing Boards shall enjoy responsibility allowances and bonuses according to the mechanism applicable to the full-timers.

3. The Government shall guide the regimes of wages, bonuses and responsibility allowances of the Managing Board members.

Article 36.- Conditions for chairmen and members of the Managing Boards, and general directors to participate in managing other companies

The Managing Board chairmen, the Managing Board members, the general directors may only hold managerial posts in limited liability companies, joint-stock companies or foreign-invested companies when they are nominated to the managerial posts or designated to be the companies’ representatives for the capital portions contributed to such enterprises, by their companies or competent State organizations.

Spouses, fathers, mothers, children and siblings of the Managing Board chairmen, the Managing Board members or the general directors of the companies must not hold the post of chief accountant or cashier at the same companies. The companies’ economic, labor and/or civil contracts signed with the Managing Board members, the general directors, with spouses, fathers, mothers, children or siblings of the Managing Board members or the general directors must be notified to the persons who have appointed such Managing Board members, general directors, or the persons who have signed contracts to hire such general directors; in cases where the persons who have appointed the Managing Board members, the general directors or the persons who have signed contracts to hire the general directors detect that the contracts aim for self-seeking purposes and are not yet signed, they may request the Managing Board members or the general directors not to sign such contracts; if the contracts have been already signed, they shall be considered null and void, the Managing Board members or the general directors must pay damages to the companies and be handled according to law provisions.

Article 37.- The Control Board

1. The Managing Boards shall set up the Control Boards to assist them in inspecting and supervising the legality, accuracy and truthfulness in the management and administration of business activities, in accounting book recording, financial statements and the observance of the companies’ charters, the resolutions and decisions of the Managing Boards, decisions of the Managing Board chairmen.

2. The Control Boards shall perform the tasks assigned by the Managing Boards, report thereon to, and take responsibility therefor before, the Managing Boards.

3. A Control Board is composed of its head being a Managing Board member and a number of other members to be decided by the Managing Board. The Trade Union organization in a company shall nominate a representative who satisfies all criteria and conditions prescribed in Clause 4 of this Article to be member of the Control Board.

4. The Control Board members must fully satisfy the following criteria and conditions:

a) Permanently residing in Vietnam;

b) Having good health, good moral quality; being honest, incorruptible; having good sense of law observance;

c) Being proficient in economic, financial-accounting, auditing operations or professions;

d) The Control Board members work on a full-time basis and do not concurrently hold leading positions in the State apparatus;

e) Spouses, fathers, mothers, children or siblings of the Managing Board members must not hold the post of Managing Board member, general director, chief accountant or cashier in the same companies.

5. The expenses for operation of the Control Boards, including wages and working facilities, shall be ensured by the companies.

Article 38.- General directors, deputy-general directors, chief accountants and assisting apparatuses

1. The general directors are the companies’ representatives at law, administering the daily activities of the companies according to objectives, plans and in accordance with the companies’ charters as well as resolutions and decisions of the Managing Boards; take responsibility before the Managing Boards and law for the exercise of their delegated powers and performance of their assigned tasks.

2. The deputy general directors shall assist their respective directors in administering the companies under the latter’s assignment and authorization; take responsibility before the general directors and before law for their assigned or authorized tasks.

3. The chief accountants have the tasks to organize the performance of the companies’ book-keeping work; assist the general directors in supervising the finance at the companies according to the legislation on finance and accountancy; take responsibility before the general directors and law for their assigned or authorized tasks.

4. The offices and professional bureaus and boards shall function to advise and assist the Managing Boards and the general directors in managing and administering affairs.

Article 39.- Criteria and conditions for selection of general directors

The criteria and conditions for selection of general directors shall be the same as those applicable to directors, prescribed in Article 24 of this Law.

Article 40.- Selection, appointment and dismissal of, signing and terminating contracts with, general directors, deputy-general directors, chief accountants

1. The general directors shall be selected, appointed, dismissed or have their labor contracts signed or terminated by the Managing Boards after they are approved by the persons who decide on the establishment of the companies.

2. The deputy general directors and chief accountants shall be selected, appointed, dismissed or have their labor contracts signed by the Managing Boards at the proposals of the general directors.

3. The general directors, deputy-general directors and chief accountants shall be appointed or sign contracts for a maximum duration of five years and may be re-appointed or renew their contracts.

4. The procedures for selection, appointment, dismissal of, or signing and terminating contracts with, the general directors shall comply with the Prime Minister’s regulations.

5. The general directors shall be relieved from duty or have their contracts terminated ahead of time in the cases prescribed in Clause 3, Article 25; shall be replaced under the provisions of Clause 4, Article 25 of this Law.

Article 41.- Tasks and powers of the general directors

1. To elaborate the companies’ annual plans, capital mobilization schemes, investment projects, joint-venture schemes, managerial organization schemes, internal management regulations, labor training plannings, schemes on business coordination among member companies (if any) or with other companies for submission to the Managing Boards, the Managing Board chairmen.

2. To formulate techno-economic norms, product standards, wage price units in conformity with the State’s regulations and submit them to the Managing Boards for approval; to inspect the units in the companies in implementing the norms, standards and unit prices set within the companies.

3. To propose the Managing Boards to appoint, remove from duty, dismiss, sign and terminate contracts with, commend, discipline and decide the wage raising for, deputy general directors and chief accountants of the companies; to decide on designation of representatives of the companies’ contributed capital portions in other enterprises.

The directors and chief accountants of member companies and non-business units of the State corporations, where the corporations own the entire charter capital, shall be selected by the general directors for appointment or signing and terminating contracts after they are approved by the Managing Boards.

4. To decide on investment projects, asset purchase and sale contracts, borrowing, lending, renting, leasing and other economic contracts, sale and purchase prices of products and services of the companies according to the decentralization and authorization by the Managing Boards and the companies’ charters.

5. To sign civil and economic contracts according to the provisions at Point b, Clause 2, Article 30 of this Law as well as other economic and civil contracts according to the provisions of law.

6. To decide on selection of, signing and termination of contracts with, or appointment, dismissal, commendation, discipline of, on raising of wages and allowances for, the following titles:

a) Directors and chief accountants of the independent cost-accounting member companies and non-business units of the corporations after getting the Managing Boards’ approvals;

b) Heads of bureaus (boards), deputy-heads of bureaus (boards) of the corporations;

c) Deputy-directors of member companies and non-business units of corporations at the proposals of the directors of member companies and non-business units;

d) Other managerial titles in the companies as decentralized by the Managing Boards.

7. To organize the implementation of business plans, investment plans; to decide on market development, marketing and technological solutions; to administer activities of the companies with a view to realizing the resolutions and decisions of the Managing Boards.

8. To report to the Managing Boards on business results of the companies; to effect the publicity of financial statements according to the Government’s regulations.

9. To submit to the inspection and supervision by the Managing Boards, the Control Boards and competent State management bodies of the performance of the functions and tasks according to the provisions of this Law and other law provisions.

10. To apply necessary measures in case of urgency and to immediately report such to the Managing Boards and competent State agencies.

11. To enjoy annual wage regimes. The wage and bonus levels corresponding to the business efficiency of the companies shall be decided upon by the Managing Boards or comply with the signed contracts.

The regime of payment and settlement of wages and bonuses shall be the same as those applicable to directors according to the provisions of Clause 10, Article 26 of this Law.

12. Other powers and tasks as provided for by this Law, the companies’ charters and decisions of the Managing Boards.

Article 42.- Relationships between the Managing Boards and the general directors in managing and administering the companies

1. Upon organizing the implementation of resolutions and decisions of the Managing Boards, if detecting matters not in favor of the companies, the general directors shall have to report them to the Managing Boards for consideration and adjustment of the resolutions and decisions. The Managing Boards must consider the proposals of the general directors. In cases where the Managing Boards do not readjust the resolutions and/or decisions, the general directors shall still have to implement them but are entitled to reserve their opinions and propose them to the persons who sign the decisions on establishment of the companies.

2. Within fifteen days as from the end of the months, quarters and years, the general directors must send the written reports on the business situation and implementation orientations of the companies in the following periods to the Managing Boards.

3. The Managing Board chairmen shall attend or appoint representatives of the Managing Boards to attend briefings, meetings in preparation for schemes for submission to the Managing Boards, which are presided over by the general directors. The chairmen or representatives of the Managing Boards attending the meetings may contribute their comments but have no right to make conclusions on the meetings. The general directors who are not Managing Board members shall be invited to attend meetings of the Managing Boards, may speak but have no right to vote.

4. The decentralization and authorization of the Managing Boards, the chairmen of the Managing Boards for the general directors as provided for in Articles 30, 33 and 41 of this Law must be recorded in the companies’ charters.

Article 43.- Obligations and responsibilities of the chairmen and members of the Managing Boards, the general directors

1. The general directors take responsibility before the Managing Boards and law for running daily activities of their companies, for the performance of their delegated powers and assigned tasks. The Managing Board members must jointly bear responsibility before the persons who issue decisions on their appointment and before law for the decisions of the Managing Boards, the results and efficiency of their companies’ activities.

2. The Managing Board chairmen and members, the general directors shall have the obligations:

a) To exercise with honesty and responsibility the delegated powers and assigned tasks for the benefits of the companies and the State;

b) Not to abuse their positions and powers to use the companies’ capital and assets for the benefits of their own and other persons; not to give the companies’ assets to other persons; not to disclose the companies’ secrets while acting as Managing Board members or general directors and within at least three years or within the duration prescribed in the companies’ charters after resigning from the post of Managing Board member or general director, except for cases where so approved by the Managing Boards;

c) When the companies fail to fully repay payable due debts and other property obligations, the general directors shall have to report such to the Managing Boards, seek measures to overcome the financial difficulties and notify the companies’ financial situation to all creditors; the Managing Board chairmen and members as well as the general directors must not decide to raise wages, must not deduct profits to pay rewards to managerial officials and laborers;

d) To bear personal liabilities for the damage incurred by creditors if failing to implement the provisions at Point c of this Clause when the companies fail to fully repay the payable due debts and other property obligations;

e) To pay damage compensations according to the provisions of law and the companies’ charters if the Managing Board chairmen and/or members or the general directors violate the charters, make decisions ultra vires or abuse their positions or powers, thus causing damage to the companies and the State.

3. When committing violations in one of the following cases but not seriously enough to be examined for penal liability, the Managing Board chairmen and/or members, and the general directors shall not enjoy bonuses, wage raising and be disciplined, depending on the seriousness of their violations:

a) Letting their companies suffer losses;

b) Losing the State capital;

c) Deciding on inefficient investment projects, failing to retrieve investment capital, failing to repay debts;

d) Failing to ensure wages and other regimes for laborers in the companies according to the labor legislation;

e) Letting violations in the capital and asset management, the accounting, auditing or other regimes prescribed by the State be committed.

4. The Managing Board chairmen who show irresponsibility and fail to strictly comply with the provisions of Clause 2, Article 33 of this Law, thus leading to one of the violations prescribed in Clause 3 of this Article shall be removed from duty; and pay compensations for damage according to law provisions, depending on the seriousness and consequences of their violations.

5. In cases where they let their companies fall into the state prescribed at Point a, Clause 3, Article 25 of this Law, the Managing Board chairmen and the general directors shall have their wages lowered or be dismissed, depending on the seriousness and consequences of their violations, and at the same time have to pay compensations for damage according to law provisions.

6. If State companies fall into the state of bankruptcy while their general directors fail to file the applications for bankruptcy, they shall be removed from duty or have their contracts terminated and be held responsible as provided for by law; if the general directors fail to submit the applications while the Managing Boards do not request the general directors to submit the applications for bankruptcy, the Managing Board chairmen and members and the general directors shall be removed from duty or have their contracts terminated.

7. If the State companies, which are subject to reorganization, dissolution or ownership conversion, fail to carry out the procedures for reorganization, dissolution or ownership conversion, the Managing Board chairmen and members, the general directors shall be removed from duty or have their contracts terminated.

Section 3. FORMS AND CONTENTS OF LABORERS’ PARTICIPATION IN THE MANAGEMENT OF STATE COMPANIES

Article 44.- Forms of laborers’ participation in the management of companies

The laborers shall participate in the management of their companies through the following forms and organizations:

1. The general assembly or the congresses of delegates of workers and employees organized in from teams, groups, workshops, sections, boards to companies;

2. The companies’ trade union organizations;

3. The people’s inspection boards;

4. The exercise of their rights to petitions, complaints and denunciations according to law provisions.

Article 45.- Contents of laborers’ participation in the management of companies

The laborers are entitled to participate in discussing and commenting on the following issues before the competent authorities make decisions thereon:

1. Orientations, plan tasks, measures for production and business development, reorganization of production in the companies;

2. Schemes on equitization, diversification of ownership of the companies;

3. The companies’ internal rules and regulations directly related to the interests and obligations of laborers;

4. Measures for labor protection, improvement of working conditions, material and spiritual life, environmental sanitation, training and retraining of laborers of the companies;

5. Casting votes of confidence on the chairmen and/or members of the Managing Boards (if any), general directors or directors, deputy general directors or deputy directors, chief accountants, when so requested by competent State bodies;

6. Through the general assembly or congresses of delegates of workers and employees and trade union organizations, the laborers are entitled to discuss and vote to decide on the following issues:

a) The contents of, or amendments and supplements to, collective labor agreements for the representatives of the labor collectives to sign with the general directors or directors of State companies;

b) The regulations on the use of welfare and reward funds as well as plan norms of the companies, which are directly related to the interests and obligations of the laborers in conformity with the State’s regulations;

c) The evaluation of the operation results and programs of activities of the people’s inspection boards;

d) The election of people’s inspection boards.