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Discussion based on the shareholding structure of corporate governance issues

Author: Anonymous From: www.yourpaper.net Posted: 2009-03-30 14:52:36 Read:
Abstract: relative to the high growth macroeconomic governance of listed companies in China is seriously lagging behind, has become a bottleneck restricting the core competitiveness of China's listed companies. Corporate governance is not perfect, until China's securities market has brought serious harm to listed companies. From research firm shareholding structure, this paper analyzes the shareholding structure of the impact on corporate governance, combined with the basic status of the shareholding structure of listed companies in China on the basis of theoretical studies, proposed to improve the governance of listed companies in China's proposal.
Keywords: corporate governance; ownership structure; incentives; monitoring mechanism

Ownership structure and corporate governance

Ownership structure on corporate governance is mainly reflected in two aspects of the incentive and monitoring on the company's performance and corporate governance, have different effects on different shareholding structure of the company's operating supervision and motivation. Key
1.1 Ownership Structure and incentives
One of the core of corporate governance is the solution to the principal-agent problem, incentive mechanism is used to solve the problem of the relationship between principal and agent power mechanism, to ensure that agents consciously take the appropriate behavior to maximize the effectiveness of the principal.
Of highly concentrated equity or the existence of absolute control of the main tend to favor the company's business incentives. The high concentration of shareholding or the existence of absolute controlling shareholder, the controlling shareholder is often directly involved in the Board of Directors to carry out operation and management. When the concentration of equity and the relative controlling shareholder and other large shareholders coexistence when the company's business incentive is more complicated. The the relative controlling shareholder based on a certain share of the company equity of the company exist the operating incentives under normal circumstances, but in view of the absolute percentage of shareholding held limited proportion of its absolute commitment to operating losses will not be great. Especially when an operating activity can generate revenue for the relative controlling shareholder to the company's operating loss, should the relative controlling shareholders from absolute return greater than its proportionate share of the operating loss is even possible decisions in the The operating activities harmful to the interests of the company as a whole. The purpose of equity is widely dispersed companies, the interests of the managers and owners are generally difficult to reach agreement. Key
1.2 Ownership Structure and control mechanisms
As an important part of the internal corporate governance mechanism, monitoring mechanism is operated by the company the necessary constraints and an important guarantee for corporate governance and its performance can be improved. Shareholding structure of the Company to monitor the level of the internal corporate governance mechanisms have an important impact, the problem only lies in the differences in the degree of concentration of ownership will enable the owners or shareholders of monitoring its effect on the operator's different.
In the the equity highly centralized governance structure, the interests of drivers, major shareholders have the effect of limiting the economic incentive and ability of management at the expense of the interests of shareholders to seek their own interests behavior can more effectively monitor the behavior of the managers. Relatively concentrated ownership structure, by the internal interests of the major shareholders of restraint, to achieve mutual supervision to protect the interests of all shareholders, which is called the equity checks and balances. In the case under the Company's equity is widely dispersed, dispersed shareholders based on their own limited ability to monitor the assessment and monitoring of cost considerations, each trying to "free ride" and basically give up on the company to monitor the rights and responsibilities of the company the operators monitoring is particularly evident.
According to the above analysis, several large shareholders holding equity structure can be drawn, more conducive to play the role of the corporate governance mechanism, the basic situation of the shareholding structure of listed companies in China, qualified body by reshaping the state-owned shareholders, " share dominance "to several large shareholders of checks and balances and the development of institutional investors and an effective solution to the share set and other measures to optimize the company's ownership structure, improve the governance structure of listed companies in China. Key

2 Listed Companies in China the main problems

According to the information disclosed in recent years, the presence of a prominent issue of governance of listed companies in China is the controlling shareholder of the occupation of the interests of listed companies, even emptied profits of listed companies, as demonstrated by the three aspects: First, the major shareholder and its related parties funds of listed companies; largest shareholder of listed companies to sponsor; Third, the largest shareholder of the transfer of assets and profits of related party transactions.
The reason for this has a great relationship with the capital structure of listed companies in China. The capital structure of listed companies in China, state-owned shares and legal person shares in the non-tradable state of controlling or relatively controlling, and the strength distribution is extremely uneven between the major shareholders, state-owned shares "dominance". The defects of the shareholding structure will inevitably lead to shortcomings in the corporate governance mechanism, the impact on the company, the establishment of external checks and balances and benign operation.
First, the over-concentrated ownership makes constraint is difficult to form between the shareholders, minority shareholders of state-owned major shareholder difficult to implement an effective constraint, it is difficult to form on the supervision and control of the management, minority shareholders "vote with their feet", so the major shareholders to minority shareholders interests against inevitable. Second, a large number of non-state-owned shareholder's equity percentage is too small, lack of motivation to participate in corporate governance. Truly participate in the general meeting of shareholders, only a very few large shareholders, these shareholders are basically members of the board of directors, such general meeting became a substantial shareholder meeting, in other words, is also a major shareholder of the board meeting. Once again, the state-owned shares, the owner of the dummy bit makes the lack of state-owned equity real clear owner to exercise the rights of shareholders, resulting in the lack of state-owned capital value-added power and management supervision and motivation, the lack of direct and effective control over the public shareholders of the enterprise, equity constraints on managers hardly be able to form, resulting in serious "internal control" phenomenon and moral hazard, can not guarantee the interests of management and shareholders' value consistent failure of the checks and balances in the corporate governance, corporate governance is difficult to achieve efficiency, direct consequence of the large shareholder and the listed company does not have a separate institutions, assets, personnel, financial and business interests of listed companies, whose major shareholder is erosion, damage to the interests of other shareholders, through related party transactions or guarantee the assets of listed companies offers the possibility of funds emptied. Fourth, the split of the company ownership concentration and distribution rights, corporate governance mechanisms can not be formed by the management of the largest shareholder of appropriate constraints or exercising its rights as a shareholder. This leads to the possibility of acquisition of the outstanding shares through the secondary market to get control of the company basically does not exist, can not compete through mergers and acquisitions and distribution rights for constraint management, management without fear of the constraints and management of small and medium shareholders replace pressure without to make decisions based on business performance, often harm the interests of minority shareholders to safeguard the interests of large shareholders and management.
Famous economist, how to arrange the equity structure of listed companies, state-owned shares "due to the dominance situation is to improve the corporate governance structure of the first direction. Key

3 to improve the structure of listed companies to improve corporate governance

Listed Companies in China mechanism, the theoretical circles the discussion has been a long time, also made a lot of solutions, in order to improve the efficiency of corporate governance, the main points: One is to eliminate the situation of the stock market segmentation, the progressive introduction of all stock exchange tradable shareholders the same rights and rationalize the price mechanism, to provide the conditions for the establishment of an external takeover market. The second is to restructure the shareholding structure, through a variety of state-owned shares of listed companies split share structure reform, the establishment of shareholding moderate concentration but several large shareholders but the degree of concentration or excessive fragmentation of checks and balances of corporate governance mechanisms. This paper presents recommendations to address governance issues of listed companies in China are as follows:
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