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The post-split share governance of listed companies in the era of structural optimization research

Author: ChenYunZuo From: www.yourpaper.net Posted: 2010-01-20 09:30:06 Read:
[Abstract] carried out with the split share reform, have a profound impact on the governance structure of listed companies in China, which is mainly reflected in the gradual improvement of the rationalization of the governance structure, management incentives, therefore, how the new market environment to promote the development of the company has become a pressing problem.
[Keywords] split share structure after the era of corporate governance structure competitive mechanism equity incentive
With the basic completion of the split share structure reform, China's capital market has entered the era of the shares in full circulation is characterized after the split share. In respect of listed companies, corporate governance norms enterprises can promote increased enterprise value, at the same time, the potential merger threatened to force large shareholders and corporate management to the face of a common goal: price. As a result, a listed company on the management incentive corporate behavior of one mind, and management the alternation with high incentive will be a common phenomenon in the future market, the external supervision and restraint mechanisms constantly improve the level of corporate governance will promote improved steadily . However, only a temporary method of split share structure reform of listed companies, and can not solve the dishonesty, the presence of a large number of poor-quality listed companies, the loss of investor confidence and other issues, can only effectively improve the corporate governance structure is the solution.
1 after the split share the times listed company governance structure
1.1 "internal control" may be more prominent
Split share structure reform to change different shares in different rights the different Lee "equity split state, and ultimately achieve full circulation, but, it is not the full circulation means that state-owned shares tradable share reform only provides the state-owned shares reduction of the likelihood of this possibility that is, after the split share structure reform, part of state-owned shares in circulation up, if dispersed in many hands of individual investors, China's equity mode will move closer to the Anglo-American model of dispersed ownership, may change the current governance structure, the center of conflict between the controlling shareholder managers alliance "with the shareholders of circulation toward the the manager shareholders" contradictions changes in the governance structure of the Company, has equity less minority shareholders are unwilling take the cost to collect the information, the right to exercise supervision and control of the Board of Directors, the abnormal direct result is that the rights of the enterprise managers zoom, appear weak shareholder, strong management, leading to the emergence of a new form of "internal control" phenomenon .
1.2 size of shareholders' interests dispute will continue to exist
Kin The medium people think that after the completion of the split share structure reform, the major shareholders of listed companies will become the dominant force in the market, it will be financial manipulation, disclosures, stock price manipulation set in when it comes to changes in the pattern after the completion of the split share structure reform, one will be the most active force in the market.
As mentioned above, even if the split share structure reform, the share price of the company's shareholder value judgment standard, major shareholders began to care about the price, but this does not explain all the shareholders actually sit in the same boat. Series behavior of the transfer of benefits between listed companies with related parties can not be cut off in the overall listing system, control of large shareholders to use its information advantage, as well as small shareholders can not share, profit manipulation pursue their own interests maximize the erosion of the interests of minority shareholders. Diversification of shares full circulation of the major shareholders may take action: various forms of "tunnel action" (tunneling), earnings management, asset injection and selective information disclosure , therefore, China's securities market related transactions, false information, and will not be a recession, future acts of fraud only in the form of transaction, means more skilled.
After the equity split times listed company governance structure optimization countermeasures
2.1 introduce competition mechanism, enhance corporate value
We know that, within the company shareholders (shareholders) and management has the absolute advantage of information and decision-making with respect to external shareholders (minority shareholders), and can make use of their own advantages, the private benefits of control over the holding gains or control over. Governance of listed companies in China main problem is no institutional arrangements on the protection of the interests of investors in an important position, and thus the board of directors or management can ignore the existence of the external medium and small investors. In order to change this state, we can attempt to introduce a competitive mechanism: if the company is to make an equity financing, the financing commitment must be pledged to investors after the promised return on investment is realized, in this case, The internal shareholders will continue to retain control over, and access to the ex post control of the holding gains and private benefits of control; Otherwise, control will be transferred to the hands of outside shareholders by outside shareholders, through the reorganization of the Board commissioned a professional financial institutions, and by the managers market re- The hire company management. In the new management structure, the original internal shareholders only supervisory powers and the right to dividends, and have no control over. Similarly, controlled by outside shareholders, the Board of Directors on the return on investment promised in the original internal shareholders afterwards can achieve, outside shareholders will continue to maintain control over, and get the benefits of control, or control over, again transferred to the original internal the hands of the shareholders.
2.2 appropriate management oversight mechanisms to eliminate fraud motivation
(1) as the core stock options improve executive incentives
Split share structure reform, the major shareholder of the stock can be listed negotiable, the stock's premium income can be realized, the interests of the controlling shareholder will also be subject to price fluctuations impact, driven by the interests of large shareholders will use the criteria of market-oriented management supervision and encouragement, success stories from home and abroad, the number of listed companies by the shareholders and management to enter into a certain amount of income compensation plans, such as "Stock Option Plan" motivate management to pursue the goal of shareholders, which will link the interests of investors and management, among them more than just a simple delegate and agent relationship, the management also has ownership of the company, which greatly mobilize the enthusiasm and creativity of the management, wealth preservation and appreciation of themselves and their shareholders. Of course, while the implementation of the listed company equity incentive can not ignore the corresponding constraint mechanism, the most effective is to vigorously develop the market of professional managers, improve the credit reporting system of the executives of listed companies, and strengthen their market constraints, accompanied by strong legal and administrative supervision.
(2) to strengthen the rights of minority shareholders, to actively participate in the monitoring
Because there is serious information asymmetry between controlling shareholders, management, and small and medium-sized retail, a considerable part of investors think they are weak and passive attitude toward the right to vote, resulting in management has the opportunity to obtain excess returns through collusion with the controlling shareholder. Therefore, in order to put an end to the behavior of the black-box operation, Zhongcheng system implemented on the collusive behavior of large shareholders and management to make compensation to the holders of tradable shares; same time, the strengthening of minority shareholders exercise convenience. The convenience of the exercise is to achieve the basic path of implementing the principle of substantive equality "Shareholders", specifically to protect the convenience of the exercise is to the protection of the interests of minority shareholders beforehand mechanism to help small and medium-sized shareholders groups to use their right to vote (with the power of the hand "or with" feet ") behavior against their interests, the company may be given prompt reaction constrain promoting shareholder activism in the medium and small investors to guide ordinary investors to safeguard their rights and interests, and can also promote the establishment of small shareholders in joint will give full play to the overall advantages to pin down the institutional investors and the controlling shareholder.
[References]
[1] Ru, split share reform operating practices and after equity split the era [M], first edition, Beijing: China Press, 2006.
[2] Liu Lin, a large state-owned shareholders control over state dependent model [J] the Finance the scientific ,2005.2,133-139.
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