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Comparison of EU SME Corporate Governance

Author: OuYangWenHe Du From: www.yourpaper.net Posted: 2007-11-20 07:41:05 Read:
Abstract: corporate governance, from its theoretical origins appear after the separation of ownership and control SME corporate governance is, therefore, reasonable to ignore. However, due to the presence of the interests of the association's corporate governance, corporate governance expanded SME Corporate Governance also pay attention to it. Corporate governance of China's small and medium enterprises, compared with the EU SME Corporate Governance, distinctive unique place in the form of the company's stakeholders, governance structure, external governance.
Keywords: SME Corporate Governance EU

Ouyang Wen: Master of Philosophy, Doctor of Economics, Hunan Business School, director of the Institute of Private Enterprise
Du Yan: Master of Economics, Hunan Business School research at
This article is part of Hunan Business School Professor Ouyang steep - EU fund projects in China Hunan SME corporate governance and its docking with EU companies achievements.
Black box
one problem: SME Corporate Governance
Corporate governance issues along since Berle and Means (1932), from their big forward since the advent of the modern company with private property, the separation of ownership and control really get attention. Lerner (1966), there are a lot of "management control", Chandler (1977) formally summarized as "Managerial Revolution" that this ownership and control separation "Managerial Revolution" is a significant symbol of American corporate history and such enterprises called "manager enterprise. The Corporate Governance start caused widespread concern in the world within. The early 1980s, corporate governance as an explicit concept in the economics literature, in the 1990s, corporate governance is regarded as the main problem of economic development in the West.
Emphasis on corporate governance in our country, only seven or eight years, but the formation of a large amount of literature and writings. Theorists study, although not yet formed a complete system of corporate governance, but it has been the focus of mainstream economics research content. Corporate governance in China, since the start of the study, the main concern is the governance of state-owned enterprises, as principal - agent system power decomposition problem, decentralization incentives - constraint problem, the inconsistency of the stakeholders, team production free-riding behavior, information asymmetry fraud and moral hazard problems.
Small and medium-sized enterprises (generally regarded as "classical enterprise") subject to the restrictions on the scale, corporate governance is often a more simplified form, owners and operators and is not a strict distinction between the company's shareholders' meeting, board of directors, board of supervisors and operators team often highly unified, recurring problems in the corporate governance of large companies, small and medium-sized enterprises have not yet common. This is probably the SME Corporate Governance "black box" of the reasons why the theoretical research.
Second, SME Corporate Governance necessity
Corporate governance, domestic and foreign academic circles and there is no concept of a unified discourse representation abroad Cochran and Wodtke (Cochran, P. and L. Wartick, 1988) in domestic fee Fangyu (1996) summarized relatively influential. Corporate Governance in the initial, mainly refers to the company's internal governance structure, the governance of the series of conflicts that caused by the separation of ownership and control. Due to the presence of stakeholders (eg, Cochran and Wodtke, including specific issues generated by the interaction of the other stakeholders of the senior managers, shareholders, board of directors and the company's corporate governance; fee Fangyu including the handling of the relationship between the parties to the participants) definition of the concept of corporate governance therefore been extended to become a definition of governance including internal governance and external governance. Corporate governance is a set on which the guidance and control, organizational mechanisms and rules to manage enterprise operations. The extension of the areas of corporate governance, to SMEs corporate governance theory necessary between members of conflict of interest and transaction costs to the agency problem can not by contract to resolve these two conditions exist, then the business will have to face the company governance issues.
On the other hand, the vigorous practice of SMEs, SME Corporate Governance Research relatively very poor. SMEs in China in the number of over eight million, accounting for 99% of the total number of enterprises, they have created 60% of the total industrial output value added industrial output value of more than 76%, and about 60% of total exports 40% of the profits and taxes, SMEs also provides about 75% of the urban employment opportunities. SMEs are an important pillar of China's economy.
Third, our SME corporate governance characteristics
SME corporate governance has attracted more and more attention. Compared with the EU, there is a distinctive feature of China's SME Corporate Governance.
De facto general zoned type particularity
SMEs in China after 20 years of development, the withdrawal of state-owned enterprises in the field of competition and the privatization of state-owned capital, SMEs in China has been on the international private enterprises basically there is no essential difference between SMEs in China, we are talking about SMEs in the general sense. But on relevant policies formulated by the Chinese government, but also with a clear plan color, the SME Law of the People's Republic of China, as promulgated in 2002, "the two said," The purpose of this Law SMEs, in the People's Republic of China lawfully established within help meet the needs of the community, to increase employment, in line with national industrial policy, the scale of production and operation of enterprises belonging to small and medium-sized with various forms of ownership and various forms of criteria for the classification of SMEs by the State Council department responsible for corporate work based on enterprise workers The number of sales and total assets were combined with the characteristics of the industry to develop, and submitted to the State Council for approval. "
Criteria for the classification of SMEs in China there is also the obvious problem: the division of the firm size standard formulation is not the purpose of supporting SMEs, the criteria for the classification for the state-owned small and medium enterprises, urban and rural areas not to the majority of non-public enterprises and rural areas, streets, small businesses are to include, not general.
While in a foreign country, such as the European Union in early 2000, the Commission recommended to use the following criteria to measure enterprise scale: 1 Number of Employees: 50 people for small businesses 50-250 were medium-sized enterprises, more than 250 people for large enterprises; 2. Assets Amount: 2.5 million for small businesses ,250-10 million euros for medium-sized enterprises, more than 10 million euros for large enterprises; turnover: 5,000,000 for small businesses ,500-20 million euros for medium-sized enterprises, 2000 more than ten thousand euros for large enterprises. EU funded project targeted to SMEs, SMEs define the number of employees does not exceed 250, annual turnover not exceeding 40 million euros in the enterprise, or net assets do not exceed EUR 27 million companies.
EU standards may have some differences with the standard of Chinese SMEs, but the EU SMEs clearly defined and based on the support of policy direction, far more than China's "Small Business Act and the small, medium and large enterprises criteria for the classification of more advanced, the operation is more convenient.
2, the form of the modern enterprise is essentially classical enterprise. Form in the enterprise, small and medium enterprises are mostly in the form of company made, we can be seen from the relevant statistics.
Table I: the scale of all kinds of private sector in 2001 Unit: million
Items


Purpose limited liability company owned enterprise partnership enterprise Co., Ltd.
Ten thousand one hundred million yuan average scale of ten thousand to one hundred million yuan average scale of ten thousand one hundred million yuan the scale average household one hundred million yuan average
Scale
Total 51.73 1483.91 28.68 13.11 487.37 37.17 137.99 1611 3.2 116.77 289 127.72 4419 .3
Source: The administration for industry and commerce Statistics Compendium 2001
Although the Chinese enterprises in the form of legal documents Sole Proprietorship Enterprise Law in the People's Republic of China "," Partnership Enterprise Law of the People's Republic of China "and" Law of the People's Republic of China, but in practice, the vast majority of SMEs because circumvent unlimited liability risk, reduce negative external effects and increase the business reputation of the need to adopt the company made. Chinese SMEs AG rarely, because Chinese law, the shares of the company needs policy funds more than 10 million yuan, and must be approved by the provincial government.
EU countries, such as France SME organizational forms generally divided into five categories: personal company, partnership, the collective name of the company, a limited liability company, joint stock company. Among them, the first three belong to the unlimited liability company, the latter two is a limited liability company. In Italy, the corporate form is divided into two categories, namely natural person (unlimited liability), the capital of the company (limited liability). SMEs of the two countries most of the chosen form of unlimited liability company. According to statistics, the proportion of the unlimited liability company in the French small and medium-sized enterprises amounted to 61% and accounted for 33% of the limited liability company, the Corporation accounted for only 6%. SMEs in Italy, 80% for natural persons who have unlimited liability companies, limited liability companies accounted for 20% of the capital.
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