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Corporate governance structure is the core of the company's system

Author: ChenQingTai From: www.yourpaper.net Posted: 2009-03-29 22:59:01 Read:
The convening of the 15th CPC National Congress Fourth Plenary Session of the flag, the reform of state-owned enterprises into a new stage of structural adjustment and institutional innovation. About enterprise system innovation, the Fourth Plenary Session of the "Decision" pointed out, "the company system is an effective form of organization of the modern enterprise system, corporate governance structure is the core of the corporate system." Basically agree with the corporate system restructuring state-owned enterprises in society in general on the basis of how to correctly understand and establish a standardized corporate governance structure, a state-owned enterprise reform, the major issues of the conversion mechanism.
Corporate governance structure is a panacea for the treatment of state-owned enterprises system defects
China's state-owned enterprise reform, always revolved around the relationship between the corporate, government, market.
Business relationship with the government focused on the government and enterprises are separated, how to separate; core of the separation of enterprise ownership and management can be separated from how to separate; separation of ownership and management is vulnerable to the possibility of establishing a standardized corporate governance structure, to protect the interests of investors. This is the reform of state-owned enterprises to overcome the drawbacks of the traditional system the main problems to be solved.
In the process of transition to a market system, the state-owned enterprises overall situation is not ideal, the reason is not just corporate management issues, more important is that there are structural weaknesses, the corporate governance mechanism is not perfect. The actual situation indicates that traditional government-enterprise relations and corporate governance mechanisms there are serious deficiencies in the system under market conditions, it can not produce a sound government behavior and corporate behavior.
In the process of carrying out reforms, we often confused: If the separation of ownership and management, the government as social managers direct management of state-owned enterprises, market economic system can not be established; phase separation of ownership and management, how to prevent operators dereliction of duty or abuse of power, the protection of national owners' equity?
For a long time, the establishment and operation of state-owned enterprises "Corporate Law, corporate assets are part of the state property, there is no concept of capital. Important matters involving business decision-making must be presided over by the Government, at the same time by the State or by state-owned banks for the debts bear joint and several liability. Face of changing market and many state-owned enterprises, the Government has to exercise control. To enable enterprises to the vitality of the market, the government tend to devolve the right to operate. Confused with ownership and management, the delegation of the right to operate at the same time to the business, often the title for such decentralized for internal control everything. When found to be out of control, the government tended to on the received power. On the closing of ownership, often turn right to operate together on closing, Corporate dead. 20 years of reform, we have wandered along this track, but it had. This problem has plagued government also plagued enterprises, so that the reform of state-owned enterprises in a dilemma.
Traditional enterprise system within the framework of delegation of authority to the enterprise, in order to prevent loss of control, to improve and strengthen the supervision of the operators, governments and enterprises through a variety of ways a lot of exploration. We have hopes on the role of party organizations in enterprises play "to ensure the supervision, but the people in charge of the party organizations and managers often due to" good brothers ", to consider the issue of point of view and interests are basically the same, and it is difficult to play a role; countries repeatedly stressed strengthen democratic supervision of the employee congress on issues related to the interests of workers play a positive role, but the core business of operating decisions, workers are often difficult to deeply involved; government time and time again on the approval of major corporate operation and investment projects, However, due to the severe asymmetry of information, "muddle through" is often not difficult; countries have passed the inspection of the "tax price" strong financial discipline, but often at the inspection team and enterprise bargaining, to pay a sum of money and trouble; government repeatedly asked the competent departments to strengthen supervision, but often due to failure by the authorities and enterprises a variety of too close a relationship; countries have sent audit and supervision departments or the party's discipline inspection departments involved in overseeing a major deterrent to the enterprise, but can seriously inspection only few, mostly the result of tight internal control and poor access to information, it is difficult to detect a vulnerability.
In 1993, the Third Plenary Session of the 14th Party Congress in determining the objectives of the socialist market economic system reform, changing the "decentralization" approach, a new way of thinking, that is, through the enterprise system innovation and steadily to achieve ownership and management separation.
Company system to provide precisely the kind of science, a viable system of separation of ownership and management arrangements be ported to state-owned enterprises, can solve haunt us for a long time between government and business ownership and management.
To changes in the system of the company will state ownership relegated to the status of shareholders, shareholders exercise their rights under the Law. Thus forming the owners equity, corporate personnel, major policy decisions and the discretion of the income distribution, or the ultimate control over; enterprises have legal property rights, the right to operate the shareholders and the company responsible corporate legal persons, or said the management of corporate property rights, control over. Phase separation of ownership and management, respectively, by the two shareholders and corporate legal entities operate independently. Enterprises to all legal persons liable for the debts, including the State, the owner of limited liability is limited to invested capital. In this way, even if the state-owned capital in enterprises remains eventually all countries, but also enable enterprises to both shareholders and market incentives and checks and balances, and to achieve self-financing.
As a result, the effective combination of public ownership of state-owned enterprises and the market economy system problems can be basically solved, in line with the socialist market economic system of government, business and market relations can rationalize and established. As the Fourth Plenary Session of the "Decision" has pointed out, "the company system is an effective form of organization of a modern enterprise system. Once the corporate governance structure is distorted, the original intention of the restructuring of the corporate system can not be achieved
The nature of the corporate governance structure is to properly handle the trust due to the separation of ownership and management, agency relationship, the relationship between shareholders and trust - Board; the relationship between the Board and the agent - manager. Including how the board loyal to the shareholders and their duties diligently, the Board how to effectively motivate and supervise managers, as well as how to balance the interests of various stakeholders relations.
Shareholders elected to represent their interests, trustworthy, capable representative of the composition of the company's top management decision-making bodies - the Board of Directors. As the highest decision-making body, the Board entrusted by shareholders owe a fiduciary entrusted with the responsibility. Directors is different from the manager, they are not to obtain wage employment personnel, their shareholders and the community trust duty and honor. Not inaugural director, in order to ensure the needs of the due diligence, you can receive traveling expenses, but who does not receive "wages" to show the directors always stand on the side of the shareholders, not the employment relationship with shareholders. The Board is entrusted with the management company, decided to corporate matters, the legal representative of the company, solely responsible for the operation and management of the company, the appointment and removal of the right to have legal control over the property and managers. If the shareholders found that the directors' negligence or failed to fulfill its fiduciary duties, may claim compensation and to court. Board to the management level and innovation capability as a the standard hiring manager. Manager as the agent for implementation of the decisions of the Board, within the scope authorized by the Board of Directors on corporate affairs independent exercise of managerial authority and power of attorney, to play the role of "chief executive officer". The operation and management of the Board on behalf of the interests of the shareholders of managers and due diligence effective incentive and supervision; establishment of a Supervisory Committee composed of representatives of the shareholders and an appropriate proportion of representatives of the employees if necessary, according to the Company Law, the Company's financial, directors and managers of official duties supervise the implementation. In this way, the owner, operator, manager in the company's institutional arrangements, in accordance with the norms of the legal system and the Articles of Association of responsibility decentralization, accountability and establish easy to evaluate and retroactive liability regime.
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