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The cost of ownership of enterprises and the corporate governance structure

Author: WeiZhi From: www.yourpaper.net Posted: 2007-11-19 04:23:29 Read:
[Abstract] China's corporate governance structure and market economic structure does not match the corporate governance and ownership costs minimized serious departure from the more prominent of corporate governance failures. Our company legislation the provisions of the Company's internal relations should be prudent and flexible, it should be targeted and plasticity. On the one hand, legislation in the choice and construction of China's corporate governance structure is necessary to moderate advance to play a guiding normative role, and must take into account the structure of China's market economy the imperfect and legislative system chaotic situation, can not be divorced from reality. Because of Enterprises in China's real ......

Corporate governance (corporate governance) is a term in the recent U.S. corporate law scholars usual. Some Chinese scholars translated as "corporate governance" (1) its meaning is generally referred to, after the separation of the company's owners and operators, the operator the master company operating power, but everyone is entitled to will abuse, dereliction of duty operators irresponsible and wasteful luxury or even associated with the interests of conveying things, doubtless There is much to. To improve or avoid such a situation, the legal checks and balances control design, it is very important. This to prevent the abuses that have long been the focus of recent corporate law scholars discussed the operators performing operations. In the form of corporate enterprise in China more complex governance structure is difficult to have a unified identity, can strive with foreign scholars research firm supervision, a variety of measures consistent with the scope, so choose the term "corporate governance" be applicable.
Enterprise legal ownership of scholars defined as "enterprise legal person in accordance with the law of his property right to enjoy the possession, use, income and disposing of ownership of the enterprise legal ownership of all the property of the enterprise legal person, including: formed by their shareholders property and property value-added business process; completely independent from the power, corporate enjoy full rights of possession, use, income and disposing of all of its property;, corporate enjoy their property from the abstract properties control over. " (2) of this definition is clearly stressed that the legal ownership and the upper civil law concept of ownership consistency, and this article is the emphasis on the internal logic of corporate ownership and governance structure Contact the ownership of enterprises using the definition of economics that residual control of the enterprise rights (residual rights of control) and the right to obtain a copy of the corporate profits or residual income (Residual earnings). Into the contract can not be complete, the future of the world is uncertain if all members get a fixed contract revenue is impossible, resulting in the issue of corporate residual claim. Claim for Firm, referring to the corporate income after deducting all fixed contract payments (such as the cost of raw materials, fixed wages, interest, etc.) balance (profit) rights, as the balance of risk, the remaining ownership enjoyed by the stakeholders. And into the enterprise contract incompleteness and uncertainty of the future of the world, someone must decide how to resolve the loopholes in the contract or to dissolve the contract, the resulting residual control rights of enterprises. Residual rights of control is no decision-making powers of the activities of the special provisions in the contract. In the governance structure level, residual claim income distribution priority column "Last Request", control is mainly for the "right to vote".
Clearly defines the concept, the theory of ownership of any universal significance must answer this question: What factors determine the ownership allocation to a particular kind of stakeholders? Whether these people are as the investor shareholders or employees of the company and even the company's creditors. Have to understand these factors, we need to then the Company Contract cluster theory (the nexus of contracts theory) (4) to be established - the company as a contract-integrated network . More precisely, the company, in essence, is a series of contracts signed, these contracts include the supply contract signed by the seller of the same raw materials or services, with individuals to provide labor services to the company entered into an employment contract with bondholders people, loan contracts signed by the Bank and other capital supply side, as well as sales contracts entered into with the buyer of the company's products. In fact, a very important function of the business organization law is to authorize the establishment of a legal entity - a separate legal entity - to act as a contract signer's role.
Need to emphasize once again that we define the business, do not own their own property is not a very important factor. Emphasized that the purpose is to clarify a legal principle: corporate ownership and property rights are not like some people think that necessarily the owner of the capital and inputs associated. Broadly speaking, the enterprises of each transaction are based on one or the other of the two kinds of relationships he counterparty. We first trading relationship is the market contractual relationship, that is the object of the transaction is not a business owner, just by the contract with the enterprise business dealings; another kind of relationship, I simply call it "ownership relationships "that is, the other side of the transaction is also the owner of the enterprise. If corporate ownership relationship is perfect, always, you can completely eliminate all the costs of market contracts, but he do not create any new costs, cost of ownership analysis is not necessary. But in fact, the ownership of the relationship itself cost, the cost of which part of the cost that we have to discuss "governance", which includes the cost of corporate ownership of collective decision-making, management personnel monitoring costs, as well as due to the collective decision-making mistakes or poor management and supervision caused by an error of judgment and expansion of the power management as a result of other costs. There is a class of the risks associated with the residual claim to bear the costs. Therefore, to achieve maximum profit is the lowest cost of ownership of the configuration state, the sum of the corporate transaction costs should be minimized, that is, the following two cost of a minimum: (1) non-owner changes in the market on transaction costs; (2) the cost of transactions from business to business owners.
So how to make the lowest cost of ownership on the level of corporate governance problem is what kind of governance model is more efficient. We have already mentioned the two core power control and residual claim of ownership. To facilitate the analysis, both of these capabilities inherent cost roughly into three types: the management of the monitoring costs, the cost of collective decision-making costs and risks assumed.
1. Monitoring of the cost of management and shareholders first "governance model
In dispersed ownership and commercial companies, all usually have considerable management rights delegated to managers employed by the enterprise. Most of the decision-making power delegated to the Board of Directors exercised the Board then most operational decision-making power delegated to the senior management, this commissioned result we often mentioned "agent costs, for ease of discussion, we Here the agent cost is divided into two categories: the cost of management supervision costs and ineffective oversight of management personnel, the management of opportunistic behavior. As the owner of the enterprise management, effective supervision, you must pay the following costs: (1) the cost of access to information on business operations; (2) all to exchange views and make decisions and communicate information costs; urged the management to implement the decisions of the costs. Here I combine these costs referred to as "monitoring costs". When the owner of the enterprise is ineffective management oversight, managers will have the opportunity to lazy or to engage in self-interest transactions. Managers to implement what is the nature of opportunistic behavior, as long as it causes loss of less than supervision and to prevent such behavior would have to pay the cost, from an efficiency point of departure, everyone should be wide open one eye and close. Therefore, the cost of an agent is to monitor the cost and cost-ineffective oversight or effective supervision impossible due to opportunistic behavior by management.
Traditional corporate law adopted a "shareholder first" model of governance, embodied in the legislation is the general meeting centrism ", ie the shareholders' meeting to enjoy the company of various rights, including the rights of the company's business, the Board views of the legislation and the Articles of Association of the Company provisions of limited powers, a vassal of the executive and general meeting of the shareholders of General Assembly resolutions. The along with the rapid development of modern information society, corporate social responsibility raised, making the shares decentralized problem, the problem of asymmetric information, free-rider problems have become increasingly prominent, the shareholders is actually difficult to exercise direct control over the company's , if we must, then, for a large number of shareholders, to make each of them can obtain the information required for decision making, decision-making costs will inevitably increase exponentially, so shareholders any other slightly higher requirements will lead to unimaginable high cost. Therefore, since all the pursuit of the largest remaining preferences will inevitably require first thought to start from the most likely to reduce monitoring costs - indolent direct monitoring, relying on the honor, moral, contract, tort and criminal sanctions mechanism. Whereby the general meeting center 'model of governance failures, the "shell" of the shareholders' meeting. The company legislation from the shareholders 'meeting centrism development to the center of the board'.
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