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Corporate governance issues triggered by the ownership structure of listed companies in China

Author: ChenJun From: www.yourpaper.net Posted: 2009-07-17 16:51:42 Read:
Abstract: The ownership structure is an important part of the corporate governance structure and based on the shareholding structure of the adjustment is not only important aspect of corporate governance behavior, and its purpose is to maximize the effective governance of the company and the interests of shareholders. On the basis of interpretation of the ownership structure, the shareholding structure of listed companies in China's current situation and the consequent corporate governance issues, and proposed specific measures to optimize the equity structure, the intention of the reform of the ownership structure and corporate governance of listed companies in China certain referential significance.
Keywords: listed companies; ownership structure; corporate governance

Meaning of the shareholding structure

In theoretical circles, the general sense that the ownership structure of various nature of a company's total share capital equity constitutes situation. Generally in our country: the composition and proportions of the total share capital of state-owned shares, legal person shares and public shares, foreign shares. The state shares entitled to the shares of state-owned assets to the company investment on behalf of the department or agency of the country, including converted into shares of the company's existing state-owned assets; legal person shares is a corporate legal entity with its disposable assets in accordance with the law formed investment company shares or institutions and social organizations with legal personality foreign shares to countries allow for investment in the shares of the operating assets of the company; public shares social individuals or workers within the AG formed personal lawful property investment company shares; refers to the stock of the issued shares of the company to foreign countries and China's Hong Kong, Macao and Taiwan investors.

Shareholding structure design arrangements

The shareholding structure of listed companies will not only affect the efficiency of its governance, but also affect the operation and management of the stock market. Therefore, the shareholding structure of the design arrangement is reasonable or not is of great significance. According to the main ingredients of the equity structure of listed companies, the general practice follows several typical design arrangements:
(1) Risk-current type. Its characteristics are: individual shares, legal person shares accounted for a larger proportion of a small proportion of state shares. The most personal and legal person shares are chasing short-term profits, and do not care about the long-term development of enterprises, often "vote with their feet" and showed a lot of speculation. Thus, the stock changed hands high stock market liquidity risk.
(2) stable inefficient type. Which is characterized by: the personal shares accounted for a very small proportion of corporate shares accounted for a smaller proportion of state-owned shares account for a considerable proportion. Circulation due to the structure of state shares and most of the corporate shares are not listed, and a stable investment. Therefore, the risk of the stock market is smaller. Even if the high rate of personal shares changed hands, but the entire stock market liquidity is weak, it basically does not affect the stability of the overall situation. In addition, the low efficiency of the corporate governance structure, a single form of legal person shares and rigid investment mechanism, resulting in the stock market inefficiency.
(3) effective integrated. Its characteristics are: a smaller proportion of the individual shares, the smallest of the large, state-owned shares of the corporate shares. The structure compatible with the advantages of the above two types, avoid the major defects. That not only taken the hand voting "but also to" vote with their feet "to have a positive effect. Therefore, moderate stock speculation, stock market stability and full of vitality. The most noteworthy is its institutional ownership is not only a large number, and the quality is very high, reflecting the unique efficiency and effectiveness.

3 characteristics of the equity structure of listed companies in China

The ownership structure of China's listed companies, mainly in the following areas:
(1) a wide range of stock, and poor circulation. China's stock market, a total of as much of the state-owned shares, legal person shares, public shares, foreign shares, internal employee shares and turn allotment six. Some of which can be in circulation, and some are not in circulation. Moreover, the outstanding shares of different kinds can be divided in different markets, with different prices. However, the actual situation of China's listed companies have rebelled against the basic logic of domestic shares and foreign shares, the market is divided, with each different market prices, the state-owned shares and legal person shares can not be traded, the negotiated transfer price is far lower than the same A-share price of the company, and the right to have different types of stock holdings body is not the same.
(2) The overall proportion of state-owned shares is dominant, and show a downward trend in the proportion of state-owned shares of listed companies. The total share capital of state-owned shares in listed companies has been dominant, but listed companies has increased from 1992 to the present downward trend. The absolute number of state-owned shares rose to 147.392 billion shares from 2.85 billion shares, the scale of 2000 is 51.72 times in 1992. Although the overall proportion of state-owned shares on fluctuating, but this is due to the large amount of companies listed equity (stock market, known as the proportion of state-owned shares of large-cap stocks) the larger cause. In fact, most of the listed companies the proportion of state-owned shares in the capital of the Company has been declining. In recent years, state-owned shareholders, transfer of state-owned shares to the other body, change the nature of equity for corporate shares of state-owned shares to achieve exit. The state-owned shareholders in the vast majority of the company's placements, issuance in part or in whole to give up, but also led to a decline in the proportion of state-owned shares.
(3) listed companies shareholders equity is a high concentration of highly dispersed and public equity. The above asymmetry reflects the imperfect system of corporate governance, equity control supervision and lack of effective means and measures, the Board of Supervisors failed to give full play to the role of the corporate governance structure. Large shareholders occupy a dominant position in the corporate governance structure and corporate governance can not form a relationship of checks and balances. Shanghai Stock Exchange in 2000, a survey showed that more than 50% of the directors of the board of directors of listed companies is appointed by a large shareholder, and more than 50% of the directors are within the company's executive director. Low proportion of non-executive directors (including independent directors), they are often not as good as the inside directors familiar with the situation, is difficult to comment on the decision-making, become "vases directors.
(4) state-owned shareholders of the absence of owners, create agency problems and damage to the two cross-cutting interests of minority shareholders. Specific performance in the national shareholders control over the company's two "super" status: on the economy, due to the absence of the owner is in control "sense of responsibility" instead of "capital" the super weak control state control; the political super set at the administrative level and administrative rights control state.
(5) With the increasing number of private enterprises listed, due to the dominance of the new private shareholders and the family shareholders. Raise the IPO price, the High Cash Dividends high allotment various "misappropriating" means endless. How to strengthen supervision of such listed companies as well as to improve the efficiency of its governance structure, to avoid private shareholders autocratic cut to protect the interests of small shareholders, and become the new issues of listed companies in China.

4 ownership structure of listed companies in China caused by corporate governance issues

The ownership structure determines the composition of its decision-making of the shareholders, and thus directly affect the candidates on the Board of Directors, and the Board of Supervisors, and then act on the managers, the last of these each other's role and influence will be shipped to efficiency integrated manifestation. In our country, due to the irrational shareholding structure, although the establishment of a number of companies and organizations such name, but did not play its due role in these institutions. Concrete manifestation:
(1) Internal control lead to the abuse of the right to operate. Internal control refers to the company's managers actually mastered the control of the Company. Listed companies, the Board is the main decision-making body of the company's internal control mainly the control of the Board of Directors of the Company for management personnel. This control is achieved through the management personnel of the Board of Directors and a director, and occupy the majority of seats in the board of directors. The members of the board of directors of listed companies in China is mainly composed of two parts: the manager layer members and representatives of the major shareholders. Largest shareholder representatives and one member of the managers. This board structure caused by internal people management personnel based on the control of the Board of Directors of the Company.
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