Petrochina a Corporate Governance

The market for the exchange of knowledge, laws, products and currencies has enormously evolved over the years. By taking a step back and observing the achievements made by the human being since his appearance. We could certainly see that our generation represents a mere microscopic portion on the timeline. Admittedly, our passage is essential, the touch of each generation ensures a balanced evolution. According to the industrial society, we say to be in the unavoidable obligation to follow a repetitive economic cycle, which means to overcome a certain decline. The global market and businesses, no matter what size they are, know this reality. However, mutual aid and normality can certainly lead us to a world where the decline is mitigating. To achieve this goal, we must be aware of what surrounds us and bring in practices and changes that are conducive to this main goal. The emergence of corporate governance is a perfect example for achieving this target, especially when the company in question is brought into the stock market.

Towards a better future

Corporate governance has become a hot topic in recent decades, mainly due to the economic slippages of our past. The departments of great importance within the companies bore a heavy weight of society and were not as well governed as they should be. In short, they did not have the necessary skills and/or objective priorities in the right places. As a result, several conventional approaches have been re-examined to counter the solutions that no longer seemed as good as had been thought. Germany and the United States having experienced economic crises like many others, put forward the adoption of a society based on the importance of corporate governance. The strategic restructuring of these two countries has served as an example for many, both legally and operationally. In general, the countries that had made changes were consisted of private, public and non-profit enterprises. For the Chinese government, it seemed very difficult to adapt. This is mainly due to SOEs. To expatriate rights of making decisions without the approval of his government was inconceivable for China's leaders.

The guinea pig

Wanting to develop an openness to foreign investment, China has reluctantly taken the example of its allies. PetroChina was the experimental farm of this adventure. The opening of this one on the economic market allowed several experts to share their interest and also to criticize the SOEs of China. During his IPO debut, PetroChine's corporate governance model did not have the characteristics requirements to be considered a legitimate actor. PetroChina has undergone many organizational changes. Today, some criticism still their practice, but coming from a region where privatization did not exist, they knew to demonstrate enormous effort which was not always desired. All to allow them to have a transparent image towards the global market. It is hard to determine the long-term goal of the company because it’s always under the control of the government. They may or may not appreciate corporate governance, but they cannot deny it’s importance. It allowed them to understand the effectiveness of corporate governance standards within a company, to consider weaknesses in market paradigms, to define solutions that parallel shareholder interests and to motivate managers and managers towards short and long term successes for a promising future. All things said, it would be foolish to say that China has made no effort to achieve the standards of good corporate governance. It remains to be seen if they will keep this rigorous practice and implant it more in the strategy of her other big players.