The privatization of state-owned enterprises is a preset government policy and all agencies must do their utmost to complete privatization in accordance with the given timetable. As all enterprises are gradually privatized, monopolistic enterprises such as those in charge of petroleum, power, and postal administration will be successively made available for privatization. The policy mission of unburdening the government of all state-owned enterprises will promote free competition and thereby stimulate the increased business efficiency of all enterprises. Furthermore, based on the principle of sustainability, all enterprises must still raise their own funds, and engage in investment in fixed assets connected with their business or reinvestment in funds relevant to their operations. To facilitate privatization, state-owned enterprises must also rely on the principle of entrepreneurial management to boost their operating performance and maintain a sound business constitution.
Furthermore, in order to enhance the operating performance of all enterprises and establish cost-consciousness among employees, all enterprises are actively encouraged to adopt responsibility center systems as a key tool for internal management assessment. All enterprises must establish responsibility centers in departments or branches in conjunction with their organizational adjustments, and these responsibility centers must be assigned relevant powers and responsibilities. At the same time, performance assessment indicators must be determined ahead of time in accordance with the nature of each responsibility center to serve as a basis for assessment. Performance assessment indicators should cover such key items as costs, expenses, revenues, and profit responsibility. All enterprises must also revise their operating performance bonus issuance regulations in conjunction with the establishment of responsibility centers. Employees should be given performance bonuses in accordance with their degree of contribution to the enterprise and their responsibility center's actual performance, achieving the goals of assessment and encouragement.
Due to the repercussions of the Asian financial crisis, Latin America financial crisis, and Enron financial scandal, etc., corporate governance has begun to receive a high level of international attention. The corporate governance principles issued by the OECD in 1999 have provided a basis for corporate governance reform efforts in many countries. Responding to international trends, Taiwan has accelerated the promotion of corporate governance reform work, and all state-owned enterprises have made corporate governance one of their key tasks in an effort to boost management functions and enhance operating performance.