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Governance of listed companies Problems and Countermeasures

Author: SunXiaoHong From: www.yourpaper.net Posted: 2009-04-05 12:43:58 Read:
[Abstract] The author analyzes the main problems in the corporate governance of listed companies, and made a series of effective measures to resolve.

Listed company involves a lot of public interest, its governance and norms by the legislative and regulatory authorities pay special attention to the provisions of the Law of the shares of the company's governance structure and operational procedures of the extremely meticulous and strict. The same time, regulators released a large number of normative documents, mandatory implementation of a series of rigorous, meticulous governance standards in the listed companies, including the Articles of Association of Listed Companies Guidelines "Corporate Governance Guidelines" the rules of the meeting of shareholders of listed companies " Establishing Independent Director System in Listed Companies guidance on the specification of the behavior of the Guarantee of Listed Companies, "and so on, these normative documents are legally mandatory effect. However, the governance of listed companies the situation is not optimistic.

Governance of listed companies is not optimistic

Data shows that 2005, the annual Shenzhen and Shanghai a total of 46 listed companies by the Commission to initiate an investigation, more than double the 2004; publicly condemned the 53 listed companies in Shanghai and Shenzhen Stock Exchange, compared with 2004 and more 16; listed companies gigs a clear upward trend, statistics show that in 2005 a total of 107 listed companies of the 177 gig, while the year-on-year in 2003, 2004 listed companies gigs are 56, 111. Listed companies in case of non-compliance as much (especially serious cases as much), the changing of the irregularity, the harm caused by large, so it is difficult to improve the corporate governance structure has been established with the theoretical and legislative linked . Violations of the listed companies are concentrated in such areas:

(A) information the disclosure of false false
Information disclosure is false violations, in addition to a handful of really out of negligence on the part of the staff, the vast majority is out to conceal the purpose of the offense. Violations: violations related party transactions, lack of internal decision-making procedures, funds used illegal guarantee, the independent directors are not independent, the supervisor does not "prison" and much more, these all reflect the structure of listed companies did not play its due role.

(B) a majority shareholder funds of the Company
Many forms: without any names, occupation, illegal guarantee, severe loss of related party transactions at the fair. The largest shareholder by virtue of its controlling position wanton encroachment resources of listed companies has become a chronic illness hindered the healthy development of China's securities market. In addition to the national legislative branch repeated orders, regulators continuous introduction of a number of provisions, ranging from the details of the construction of the system to the strengthening of the accountability system. However, these violations are still repeated, fundamental research, is the largest shareholder of the holding position at work. Governance structure of listed companies, the segregation of duties and checks and balances of the different departments is sound in theory, but in the case of large shareholders due to the dominance of checks and balances failure of listed companies was eventually reduced to a withdrawal of the controlling shareholder tool.

(C) the individual executives, misappropriate funds of listed companies
Chairman, Vice Chairman, Chief Financial Officer and other key management personnel are likely to be the subject of misappropriation of funds. As many companies in the market due to the dominance of executives who are also major shareholders and listed companies dual leadership positions within the enterprise lacks the necessary restraint mechanisms. Entire power rests in the hands of executives of the chairman of the board and its chairman of the board as the core of the very few companies, power can not be effectively constrained. In this case, bribery, embezzlement became executives of the order of the day.

(D) false financial information
The main performance of a fictitious business income and profits, such as "Finance" magazine disclosed the news of Yinchuan Guangsha Group AG fictitious profits of nearly $ 500 million in July 2001. Current issue of false financial information is very prominent, not only seriously damaged the public interest of the state and society, but also seriously affect and interfere with the normal social and economic order.

Second, the listed companies to carry out the corporate governance measures that must be taken

(A) improve the governance structure of listed companies
China's current "Company Law" corporate governance structure, like most countries, is set to the shareholders' meeting, the Board of Supervisors and management. As of all the shareholders of the company investors, the shareholders' meeting, elected members of the Supervisory Committee of the Board of Directors by the shareholders' meeting is the highest authority;, commissioned by the general meeting, are responsible for management decision-making and supervision and the shareholders' general meeting; management elected by the Board of Directors, responsible for daily operation and management of the operation. China's listed companies typical of the governance structure. However, such a theoretically sound governance structure did not play its due role in our country. For example, major shareholders occupied listed funds, misappropriation of company funds, false financial information executives, one of the sources listed company's ownership structure led to the failure of internal governance structure. As mentioned earlier in this article, in the case of "dominance", the largest shareholder controls the board of directors and became chairman of the board and even part-time general manager, easily lead to internal control issues, also occupied by the largest shareholder of listed funds, manipulation of financial accounting has facilitated information.
Therefore, to improve the corporate governance structure, the most important thing is to change the major shareholder "due to the dominance of the status quo. Can be regulated through the establishment of the legal system of property ownership, the company not only has the right to operate the assets of the company also has ownership; while encouraging the implementation of corporate cross-shareholdings, convertible, to attract foreign investment to buy shares of listed companies, to encourage business layer shareholding employees holdings and other preferential policies, the state-owned shares are widely held and underweight, gradually adjust the shareholding structure conducive to the formation of checks and balances, prevent and correct the major shareholders of non-normal behavior set by the ownership structure; addition, the need to improve corporate governance in China the structure of the board of directors system, strengthen the responsibility of the Board of Directors. Board responsible for all shareholders, strict scrutiny of enterprise investment scheme, and then decide whether to invest. If after a resolution of the board of directors led to the decision-making mistakes, the Board has to bear the responsibility of making mistakes; protection of the Supervisory Committee of the Company effective exercise of the supervisory authority is also a sound corporate governance structure is an important aspect. Powers of investigation and inspection of the Supervisory Committee of the Company's financial and business conditions and requirements for the implementation of business director, manager stop the violation of laws and regulations or the Articles of Association of the Company and this power to be corrected, should strengthen. (B) To establish and improve the Company's financial controls system
To solve the problem of false financial information, in addition to the improvement of the shareholding structure of the Company measures should also establish and improve the company's financial monitoring system. Financial control through the monitoring and control of corporate finance activities and their results, in order to promote the realization of the process of financial management objectives, improve financial control system is a necessary means of sound corporate governance structure. Only strictly monitored in order to ensure the authenticity and reliability of the financial and accounting information, to standardize corporate finance, to protect the interests of all. The financial control mechanism is an important part of modern corporate governance structure. In addition to monitoring the implementation of internal financial control by the shareholders' meeting, the Board of Supervisors, under the Board Audit Committee and internal audit institutions monitoring body, in the corporate governance of financial control, external financial control is essential. And external financial control from the capital markets, product markets, social supervision by public opinion and national laws and regulations and other external forces. It is worth mentioning, as the financial reports of listed companies registered public accounting firm audit department should be able to independently exercise their supervision, forensic rights. As a social intermediary organizations, they should have no financial interest in listed companies. According to the requirements of the International Federation of Accountants (IFAC) International Auditing Standards and the Chinese Institute of Certified Public Accountants Association of Independent Auditing Standards ", certified public accountants conducting the investigation and report should be kept in a proper independence, complete, objective and impartial manner to form an opinion. Practice vicious competition between the registered public accounting firm, in order to obtain high audit fees violation issued unqualified, false audit reports, but by a strict accounting firms audit responsibility and stepping up law enforcement, accountants The firm should and can become an important force of the external financial supervision of listed companies, through the establishment of a sound financial monitoring system to ensure the authenticity of the financial information, so as to maintain the interests of shareholders, to protect the healthy development of the company.
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