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On ownership structure and corporate governance problems

Author: XuWenLiang ZuoHu From: www.yourpaper.net Posted: 2010-05-31 09:27:50 Read:
[Keywords] ownership structure controlling shareholders of small shareholder in
[Abstract] ownership structure and corporate governance is the key to the healthy development of company, how to deal with the relationship between the two is to realize the maximization of corporate value guarantee.Because of China's state-owned holding company exists "dominance" phenomenon in the ownership structure, and thus has the problem of corporate governance related, so to improve China's state-owned holding company, corporate governance mechanism, we must optimize the share structure.This paper expounds the existing in the corporate governance in our country the problem of state-owned holding company, and puts forward some corresponding measures to optimize equity structure and improve corporate governance.
Ownership structure refers to the ratio of the total equity of the shareholders, the shareholders of a with equity, then he will have control over the corresponding to the enterprise.And corporate governance, including internal governance and external governance in two forms, such as internal governance is implemented through the corporate governance structure of the company governance activities, like the general meeting of shareholders, board of directors, board of supervisors of the company checks and balances.External governance includes numerous competition of external market and the social public opinion and the national laws and regulations, market supervision of enterprises management behavior.Corporate governance and ownership structure are closely linked, can be said that, the corporate governance depends on the ownership structure.Only the reasonable ownership structure can generally formed the perfect corporate governance is a system arrangement, arrange the relationship among the related interest subjects, coordinated through the system, solve his between existing and potential conflicts of interest.It is because the ownership structure is the foundation of the corporate governance, plays a decisive role in a considerable degree.So the optimization of the company's ownership structure is the route one must take the improvement of corporate governance mechanism.
, the current structure of equity of the company governance in our country and the existing problems in
1 many state-owned holding company "alone big", the lack of multiple ownership balance
Because China is a socialist country, has the ownership system of the public ownership in a dominant position, appeared in many listing Corporation, the state has a highly concentrated ownership, the state is the largest shareholder of the phenomenon, in our country mainly to have two kind of situations, one is refers to the country as the first major shareholder, to occupy the absolute holding position (holding more than 50%), another situation is the state shares although did not reach the absolute holding proportion, but the proportion and the second largest shareholder of the difference (more than 20% ownership gap).Just so, in the corporate governance in the management of large shareholders fundamentally unable to form the necessary constraints and restrict its power, which makes the management to ignore small shareholders, restraining ability doesn't scruple the small shareholder, it will easily lead to the neglect of the interests of small shareholders and infringement.
There is a complex relationship of parent and subsidiary company 2
In China, most of the state-owned shares to listing Corporation is formed by the original assets and personnel holding parent company, listing Corporation is the holding part of the parent company.The parent company is likely to intervention the holding of the listing Corporation's board of directors and executive level business, even as the controlling shareholder of the listing Corporation funds scouring, such as the listing Corporation to the interests of major shareholders, the unlimited shares, shares in the stock market, the stock dilution.Moreover is the listing Corporation may use the parent company to manipulate earnings, because the control of parent company listing Corporation, then the main power in the hands of the parent company's major shareholders of the hand, then the listing Corporation's management can with the parent company shareholders do not conducive to the interests of the individual decision, such as a stock, not cash dividend or less cash dividend, the surplus remaining in the listing Corporation, other risky investment.In this way, will the interests of small shareholders have a violation, but also will have a certain impact on the entire stock market.
3 "insider control" phenomenon serious
"Insider control" refers to the separation of two rights of the Modern Corporation, when investors cannot ultimately control the managers effectively, the latter may use the control right to seek individual or small group interests, damage the interests of all shareholders, this problem also exist to varying degrees in the developed countries, in the state-owned holding company in China can be said to be very prominent, representing mainly in the state-owned holding company's senior management as state-owned shares, probably does not consider the small shareholder views.The company's business, investment and capital operation, only consider the interests of maximizing of self, rather than the pursuit of the interests of all shareholders, to the detriment of the interests of shareholders, thus in the internal control of the situation, the manager may depend on the actual control over the whole body damage the interests of the shareholders.
4 the incentive and constraint mechanism is not perfect
In our country, because equity by artificial segmentation, pricing is not the same, the lack of clear state-owned equity shareholders, small shareholders and public shareholders do not have much impact on the control force of the company, constraints on the top management is really hard to form, and the management and employee stock option system is not perfect, the lack of long-term incentive mechanism of management strict, effective, making the management of all share is relatively small, can not guarantee that the interests of management and shareholders keep consistent.And upper management, business performance and annual remuneration of the company related degree is not high, the annual remuneration did not produce a significant incentive to senior managers, cannot form effective incentive to directors and top managers, so that there will be management personnel to lose interest in the company's business, the company's performance decline, causing great damage to the the shareholders of the company.
two, optimize equity structure and improve corporate governance measures of
1 to improve the political behavior of China's relevant corporate governance
At present, the political behavior of the company of our country universal existence fuzzy some normative, problems, such as business leaders to direct participation in politics, government officials directly as the behavior of enterprise leaders etc..Although you can well solve the information asymmetry between the government and the enterprise through these political behavior problems, but also can appear indistinction between the functions of the consequences, therefore, must handle the relationship between enterprise and government leaders, such as may be some incentive mechanism and the responsibility system to balance the relationship between the two, but also through the formulation and improve the relevant laws are constrained, so the use of national policy to achieve the company's own development, to solve the issues in corporate governance.
2 improve the securities market
First of all should regulate the listing Corporation, the listing Corporation to strengthen information disclosure, the shareholders of the listing Corporation's information to fully understand, reducing the information asymmetry phenomenon, such as the company's statements must be true, complete, timely disclosure of information, authenticity makes information to strengthen.The second is to solve the insider trading and market manipulation of securities trading prohibited acts, it is necessary for the government to prevent through legal means, China's "criminal law", "Securities Law" in have clearly defined.Prevention of insider trading, can launch the real-name system of securities accounts, manipulated to better dealt with insider trading and marketing staff, the implementation of legal sanctions.Finally, the investment behavior of investors, because China's securities market is not mature, speculation is very serious, the institutional investors, especially disturbing the securities market, caused the stock market strong up strong fall, for these we must severely crack down on.
3 the standard market environment, especially the improvement of related transaction regulation
At present, connected transaction is one of the main ways of Large Shareholders Expropriation of small shareholders and the interests of the company, notwithstanding the provisions of the relevant Chinese are a series of institutional Securities Regulatory Commission, also established the Interested Transactions people voting and information disclosure system, but the problem of related party transactions has not obtained the very good solution even also become aggravated.The author thinks, China should further perfect of the transactions of the legislation, establish the controlling shareholders of subordinate company related-party transactions is not fair to the subordinate company suffer damage compensation liability, the purpose is to make them know the damage of small shareholders and the holding subsidiary company interests, compulsory settlement of this question from the legal level.
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