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Corporate governance and risk management of the state-owned holding enterprises

Author: LiuZuoHua From: www.yourpaper.net Posted: 2010-05-16 21:42:13 Read:
[Abstract] state-owned enterprises due to imperfect corporate governance structure, weak risk management is an indisputable fact. In this paper, the organic integration of the corporate governance structure and risk management thinking, that state-owned enterprises to establish effective corporate governance mechanisms and risk management system must both equal emphasis should be through the establishment of the the internal dynamic risk early warning system and the constraint specification mechanism, so that the overall risk of the enterprise standardized corporate governance structure under the framework of enhanced prevention capability.
[Keywords] corporate governance, risk management system construction

A corporate governance structure and risk management relations

The corporate governance structure is the core of the company's system, the basic elements of good corporate governance structure is to improve the efficiency of enterprise management. Scientific, effective risk management system is a strong guarantee for the modern enterprise achieve its management goals.
In May 1999, by the 29 developed countries of Economic Cooperation and Development (OECD), the Council formally adopted formulated principles of corporate governance structure, it is an intergovernmental organization for the international standards of corporate governance structure determination The main criteria include: corporate governance framework should safeguard the rights of shareholders; corporate governance framework should ensure that all shareholders are treated equal; corporate governance framework should confirm the legitimate rights of the stakeholders; corporate governance framework should ensure that timely and accurate disclosure of any significant problems relating to the company, including the financial position, operating status, ownership status and corporate governance status information; corporate governance framework should ensure that the board of directors of the company's strategic guidance and effective oversight of management personnel, and to ensure that the Board responsibility for the company and shareholders.
With economic globalization, the economic development in the face of uncertainty, especially after the financial crisis, how to effectively prevent the risk of becoming the focus of attention. Risk management as a special and important enterprise management disciplines are increasingly the concern and attention of the people of response and prevention of corporate risk management has also become important index system security evaluation of enterprises operating in the international development trend. The basic premise of enterprise risk management is the existence of each subject provide value to all stakeholders for its benefit. All the main face of uncertainty, the challenges faced by the management authorities, while striving to increase stakeholder value, to determine to bear much of the uncertainty. Uncertainty may disrupt or increase the value, thus, both on behalf of risk also represents opportunity. Enterprise risk management enables managers to effectively cope with uncertainty and the resulting risks and opportunities, and enhance the ability to create value.
Europe and the United States established in the enterprise risk management system and related policies, laws involving almost all fields. American the COSO (promoters Organizing Committee) is an internationally recognized authority for the development of the internal control standards, enacted in 1992, "Internal Control - Integrated Framework" has become a universally accepted standard in the industry, the 2004 COSO Internal Control Standards extension of the launch of the "Enterprise Risk Management - Integrated Framework", and quickly got popularize.
COSO risk management framework for integration, also known as a comprehensive risk management (ERM) framework, the core concept of enterprise risk management into all aspects of corporate strategy, organizational structure, processes, and risk management responsibility locked the first acts of people engaged in business activities, risk management, which will penetrate into all aspects of business management.
SASAC in 2006, the Chinese central enterprises in overseas expansion, investment in financial derivatives, financial audit and other problems that frequently appear in, learn from the developed countries, the relevant laws and regulations of the enterprise risk management as well as U.S. and European companies in the common practice of risk management, the introduction of a "central enterprise-wide risk management guidelines, the guidelines include the central enterprises to carry out the general principles of comprehensive risk management, basic processes and management objectives and provisions of the conditions of the corporate boards to be set up under the Risk Management Committee, corporate general manager of validity to work on a comprehensive risk management The Board is responsible for, the convenor of the Risk Management Committee shall not serve as the chairman of the general manager as, as chairman of the board is also the CEO and convener of by outside directors or independent director.
The relationship between the corporate governance structure and risk management is mainly reflected in the following four aspects:
(1) between the basis of all the agency relationship, the corporate governance structure is the separation of corporate ownership and the right to operate on the basis of the agency relationship contract; risk management as a system of constraints mechanism, the implementation of the owner operators and operating control of the business process, its roots, but also between the owners and operators of agent behavior. "Agent" in order to improve the effect of the business management.
(2) The corporate governance structure theory and risk management theory emphasizes that a sound and standardized corporate governance structure is crucial for enterprise risk management, enterprise organizations to implement effective risk management protection. Risk control depends on the institutional environment of the corporate governance structure set. Risk control ability to effectively run a great relationship with the corporate governance structure is perfect. Only improve the corporate governance structure of the environment, a good risk management system in order to truly play its role, if not scientific and effective corporate governance structure, no matter to design how effective risk management system will be a mere formality and difficult to receive the established effect.
(3) the risk control can regulate corporate economic behavior to ensure that business information is true and complete, to prevent and to detect errors and malpractice to protect the security of corporate assets, ensure the implementation of relevant national laws and regulations. Therefore, risk management and corporate governance, and help to protect the interests of investors and other stakeholders.
(4) corporate governance and risk management have followed each other to contain the principle of checks and balances, the connotation of the corporate governance structure tells us, a mechanism and improve the corporate governance structure lies in the powers of the Company, formed between the decision-making mechanism, enforcement mechanisms, monitoring mechanisms effective checks and balances. Risk management framework is a basic principle of internal control, internal control is internal to contain.

China's state-owned enterprises corporate governance structure and risk management status analysis

From the corporate governance structure in terms of the state-owned enterprises: China's state-owned enterprises since the reform of the corporate system, the corporate governance structure has made some progress. : First, the relationship between the government and enterprises gradually straighten out, the role of government and functions have repositioned; ownership structure optimization, large shareholder expropriation interests of listed companies is suppressed, the interests of minority shareholders protection mechanism is formed; the independence of the board of directors of the Company and enhanced the importance of the internal checks and balances are forming; information disclosure of listed companies in the form of gradual maturing specifications, content; five external governance mechanism for continuous improvement of the legal and regulatory environment.
However, due to the complex and arduous nature of the reform of state-owned enterprises into companies, there are still many problems in the corporate governance structure of state-owned enterprises. In recent years, a number of enterprises frequently trouble falling by the wayside, corporate executives layer, for example, in the case of jet fuel and the storage of cotton, Sinopec, Chen Tonghai cases, Anhui Gujing Group scandal, fully illustrated China's state-owned enterprises in the corporate governance structure indeed, there are still serious shortcomings, the outstanding performance of the following three points: First, the control of the state-owned shares is not clear. SASAC established by resolutions of the 16th Party Congress "what is the the" supervision investor institutions, or on behalf of the State to perform the function of "institutions? Fact not clear. Too concentrated ownership structure, has been as a result of the the "plan administrative" double control role, making the state-owned listed company's shareholding structure is extremely unreasonable, the formation of the "dominance" in the Shanghai and Shenzhen listed companies the largest shareholder of the average stake up to 44.86%, while the average only 8.22% stake in the second largest shareholder, the top three major shareholders, the total average stake of nearly 60%. Equity highly concentrated, inevitably evoked the drawbacks caused by the lack of effective supervision and management of listed companies and hinder the establishment of scientific and standardized corporate governance structure is not conducive to the healthy development of the securities market. Third, due to over-concentration of state-owned shares, the main body of the state-owned equity dummy, leading to the supervision and control mechanism mere formality, a lot of restructuring of state-owned holding enterprises actual or "number one" system. Congenital weakening of the Supervisory Board not exist, it is difficult to check and balance on the board of directors, the objective is simply unable to do so on behalf of all shareholders to fulfill their supervisory functions.
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