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Of minority shareholders and the interests of the large state-owned group of companies. Stakeholders Protection Research

Author: CaoXueSong From: www.yourpaper.net Posted: 2010-04-30 22:53:48 Read:
Paper Keywords: related to the interests of minority shareholders of the large state-owned group of companies
Abstract: the establishment of China's large state-owned group of companies has enhanced the strength of the state-owned enterprises, but there has been lack of interest in the protection of its internal governance of the important issues of minority shareholders and the interests of stakeholders. Therefore, to solve this problem would have great significance in the improvement of the corporate governance of state-owned enterprises in China
China's large state-owned group of companies in the actual operation, many companies did not form effective checks and balances within the situation of good corporate governance, the obvious interest in the protection of large state-owned group of companies in the small and medium-sized shareholders and stakeholders. Since almost all of the large state-owned group of companies is a country wholly-owned or holding, due to the dominance phenomenon is very obvious, and the lack of specificity of the state-owned property owner, making it easier for people to control corporate board members and managers, internal, damage strong motivation of the legitimate rights and interests of the minority shareholders and stakeholders. Not take measures related to small and medium-sized shareholders and the interests of the interests to be protected, and will produce a very negative impact of China's capital market and the whole economy and social stability.
A corporate governance of state-owned group and particularity
The vast majority of China's large state-owned group of companies was formed through the merger and reorganization of a number of existing state-owned enterprise under the administrative power of the dominant legal multi-level large-scale state-owned group of companies operating model, which determines that Group companies and subsidiaries. Jia Kang et al (2007) to be summed up as a "two-tier governance model, refers to this double system, China's state-owned group of companies in the two levels of parent companies and subsidiaries of different planning requirements, respectively, to establish and improve the corporate governance mechanism. Specifically in the parent company level is still one yuan of property rights structure, wholly-owned by the state, the corporate governance basically followed the traditional state-owned enterprise mode, but the SASAC has begun trying to introduce outside directors to improve corporate governance and set the board of directors. In addition, the SASAC also sent the Board of Supervisors on the part of the Group companies to exercise oversight functions, the management still selected by the SASAC and the appointment will be overseen by the SASAC. A subsidiary, due mostly listed companies, in accordance with the law to establish a Western-style corporate governance institutions, the Group has a very strong control over the company for its subsidiaries. Its managers typically are appointed directly by the Corporation or individual directly by the Corporation's management, board members of subsidiaries by the Group head office staff also generally concurrently. Therefore, the majority of its subsidiaries is a multi-property rights structure, formally with the Board, the Board of Supervisors, the shareholders' meeting of mutual restraint, but the basic formality.
To the country wholly-owned or holding ownership structure caused the particularity of its corporate governance: the principal-agent relationship between the level of state-owned enterprises are already too many, the organizational form of the group companies operate this commissioned agency level will be more complicated. A principal-agent level will bring the principal-agent problem, manager layer is very easy to use control of the company for their own personal gain, the formation of internal control, produces a wide variety of corporate governance issues, serious damage to the shareholders and stakeholders interests.
Policies to strengthen the protection of the interests of minority shareholders to take advantage of meeting
Causes of minority shareholders because of its stake, "rational apathy", "free riders" in the decision-making role in the company is relatively weak, the shareholding structure of the state-owned group of companies and its subsidiaries very concentrated, so the core of its corporate governance issues by the conflict of interest of the shareholders and managers to a conflict of interests of large shareholders and minority shareholders.
(A) to improve the Board of Directors and the independent director system. The state-owned group of companies not only still part of the independent directors or state-owned retirement leadership, and the Board of Directors candidates, including independent directors administrative manner specified. In addition, most of the managers assigned by superiors, the Board can not really exercise of the rights and the appointment and removal of the recommendations of the selection of managers, but easy and managers seek common form internal control, lose the right checks and balances. Therefore, it is necessary from a legal right to clear the board of directors the right to the source and the Board on the terms of reference, so that the Board can give full play to the role. The board of directors and the independent director system is perfect, and the major shareholders are the rights of checks and balances is the best way of protection of minority shareholders.
(B) to strengthen the information disclosure system and regulate intermediaries. Strengthen information disclosure system, the stringent requirements of the form of information disclosure and disclosure procedures, in particular, have a significant impact on the company's results of operations information in a timely manner, full of minority shareholders announced shall conceal or delay the delivery of materials. Government to strengthen the standardization of intermediaries, to maintain the independence of the intermediaries, for issuing false reports should be dealt with severely, or even abolish the business qualifications.
(C) a sound external market system. China's current capital market imperfections, the stock price does not really reflect the true value of the company, company management can not be converted in accordance with the laws of the market. (D) the introduction of specialized small and medium Investor Protection Act of wells to improve the collective litigation rights of minority shareholders. Our collective right of action system is still a great defect, too high a threshold and complex judicial process a great impact on the realization of this right.
(E) to improve the standard of legal penalties. Administrative penalties for financial fraud, insider trading, market manipulation and other violations of law can not be instead of legal sanctions, and increase the penalties at the same time to improve the legal standard, to increase penalties, violation cost is greater than the violation revenue by raising compliance costs weaken improper proceeds motives.
Stakeholder interests protection ask the intestines
(A) the protection of the rights and interests of workers. Most of China's large state-owned Group Company and its subsidiaries with the trade unions and workers' congress. Them as a staff organization for the supervision of the company's operations, safeguard the legitimate rights and interests of workers have a very important role, but due to historical reasons, and now there is a lot of problems, such as the appointment and removal of trade unions and workers' congresses by senior (many of which are senior part-time), the independence of its activities is not strong, there is no independent budget system, so in order to strengthen the protection of the interests of the workers, we must improve the independence of trade unions and workers' congresses, giving it higher Personnel Management and the independent budget system, workers' organizations to play a greater role in protecting the legitimate rights and interests of workers.
At the same time, the establishment and improvement of the staff directors and supervisors system. China's new "Company Law" wholly state-owned member of the Board of Directors of the Company shall be representatives of the employees, limited liability companies and joint stock workers' representative. So must supervise the large state-owned group of companies to absorb the workers into the company board of directors, a representative of the interests of the staff and workers. And improve the terms of reference of the directors of a trade union duties, so that it can effectively exercise their own rights on behalf of the vast majority of workers. Of Supervisors to make the workers to give full play to the role of independent oversight of the company's company without prejudice to the effective protection of the interests of employees.
(B) the protection of the interests of creditors. Less in our country, because of the direct debt financing channels, corporate bonds, debt financing, especially state-owned company mainly indirect financing, financing mainly from banks, which means that the banks are the main creditors of state-owned enterprises in China. The bank has the obvious advantage of the information in the company's external governance and strong monitoring capability is an important corporate governance, external governance forces. But as the largest creditor of the bank but not in the corporate governance of state-owned enterprises play an important role. The main reason is that China's financial sector is still practiced basic is a separate operation, the existing commercial banks and securities law still prohibits the state-owned commercial banks (in addition to the State Council special provisions) hold the stock of other companies, so that commercial banks lose its rightful place in the company's corporate governance, so that this should be the role of external governance has been seriously weakened. At the same time, state-owned enterprises is a common soft budget constraint phenomenon, making the lack of protection for the interests of the bank. Therefore, progressive, and in place of our current commercial bank reform, continue to modify the existing Law on Commercial Banks and the relevant provisions of the Securities Act, the shareholding commercial bank confirmed the legitimacy of the legal, allowing banks to participate in the corporate governance structure,
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