Analysis of Motivations Behind Corruption Among Senior Executives in State-Owned Enterprises

Zhoupei Yang; Yulu Han

doi:10.54097/kwngxj68

Authors

Zhoupei Yang
Yulu Han

DOI:

https://doi.org/10.54097/kwngxj68

Keywords:

SOE senior executives, Corruption, Corporate governance

Abstract

Frequent corruption cases involving senior executives in state-owned enterprises (SOEs) are showing a new trend shifting from individual corruption to group corruption, causing significant losses to the national economy. Taking the 2022 corruption case of Kunming Steel Holding Co., Ltd., reported by the Central Commission for Discipline Inspection and the National Supervisory Commission, as an example, this paper analyzes the motivations behind SOE senior executives’ corruption from an institutional perspective. The analysis finds that the motivations for corruption among SOE executives are inherent in natural institutional flaws. The interaction between incentive failures and lack of constraints caused by these institutional defects ultimately leads to executives having motives to engage in corrupt behavior. Therefore, establishing a transparent internal information disclosure system is an effective measure to improve internal supervision mechanisms; strengthening legal constraints, rigorous government oversight, and comprehensive media supervision are important steps to enhance external supervision; actively promoting market-oriented reforms and building a professional manager market are necessary to reduce corruption motivations among SOE executives; breaking the culture of centralized corporate control is crucial for preventing corruption.

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