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Baoshan Iron & Steel Company has set up a new board of directors in a move to overhaul its management structure. The new board includes five non-Baoshan executives.

Baoshan is the first state-owned company to introduce the practice of using external oversight of corporate management. The move is regarded as an important step forward as China urges state-owned companies to carry out structural reforms.

Baosteel, the world's sixth biggest steelmaker, named its new board on Monday which consists of 9 members, including 4 company executives and 5 external members. The five external members are business leaders who have taken leading positions in overseas, state-owned and listed companies and accounting bodies.

The state asset regulator said decision making and execution should be separate processes for big enterprises, and outsiders will help achieve this.

Using Baosteel as a model, regulators said that more state-owned enterprises will take part in a campaign to revamp their management teams.

Li Rongrong, director of State-owned assets supervision and administration commission, said:"The setting up of a board of directors is a very important step in the structural reform of state owned enterprises. This is also one of the biggest ahievements of the commission since it was established. Through this process, the state asset regulator can withdraw from company management, and instead focus on the planning and adjustment of the macroeconomy. That should be the major focus of the commission."

The central government launched a campaign last year urging SOEs to conduct a structural overhaul which included bringing in outside directors. Baosteel was one of 11 SOEs picked to pioneer the plan. The reform will extend to more companies in the years ahead.