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Research on the Public Director System of Local Financing Platforms

Advance in Law / 2025,7(4): 295-311 / 2025-09-03 15 6

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• Authors: Sha Li
• Information:

  China University of Political Science and Law, Beijing, China

• Keywords:
  Local Financing Platform; Public Director System; Corporate Governance; Risk Resolution
• Abstract: Behind the local financing platform, there are huge financial and financial risks, facing the problems of capital use deviating from the public purpose, corporate decision-making ignoring long-term development and insufficient market-oriented transformation. The public director system emphasizes attention to the public interest in corporate governance, which is an innovation of the internal governance structure of the company. Introducing the public director system into the resolution of the internal operational risks of China’s local financing platforms will help to correct the development concept of local financing platforms, fill internal governance deficiencies, and achieve the maintenance of social and public interests. The public directors in the local financing platform will break the ‘inner circles’ inherent in the company’s decision-making through the exercise of various functions and powers, reconcile the conflicts of interest inside and outside the local financing platform, release the internal operation risk of the local financing platform from the root, and boost the development vitality of the local financing platform. By giving special veto rights to public directors of local financing platforms, special meeting convening rights and supervision rights to management, it ensures that the authority has sufficient ‘penetration’; on the basis of the internal supervision of the public directors of the local financing platform, the public supervision committee is set up as the external supervision institution of the public director system of the local financing platform, forming a dual maintenance of the social and public interests. Finally, settle down to the localization of the public director system of local financing platform in China, combine the excellent experience of foreign countries with the current situation of local financing platform, follow the three key points of framework construction, efficiency stimulation and risk prevention, get out of the dilemma of internal governance of local financing platform in China, and realize the vision of safeguarding social and public interests.
• DOI: https://doi.org/10.35534/al.0704027
• Cite: Li, S. (2025). Research on the public director system of local financing platforms. Advance in Law, 7(4), 295-311.