Study On Corporate Governance: Ownership Structure And Governance Mechanism

Early in the 1970s and 1980s the research on corporate governance was regarded. Until 1990s it has developed into a global corporate governance movement. The researches of corporate governance has been a worldwide issue. Under its influence, the Chinese academic circle and related agencies have paid attention to this study responding to the furthering state-owned enterprise reform, especially the listed companies' practice on corporate governance since 1993.In the beginning the research was concentrated on the corporate governance of state-owned enterprises, while since 2001 the focus has been on that of the listed companies either in theory or in practice.The subject of the dissertation is the analysis of the relationship of ownership structure and governance mechanism. There are mainly three issues: (1) The impacts of the ownership structure on the governance mechanism and how they take place and are conducted;(2) The relationship of different governance mechanisms;(3) How to adjust the ownership structure to improve the corporate governance, therefore enhancing the operation efficiency. The dissertation begins with the review of ownership structures, followed by the analysis of the impacts of the ownership structure on corporate governance and how these impacts work. Because the corporate governance mechanisms function with different costs under different ownership structures, the most efficient corporate governance mechanism with the least cost should be explored. According to this theoretical framework, we discuss the issue of multiple large shareholders check-and-balance structure and its governance system . Then we come up with the relevant suggestions on improving the corporate governance of Chinese listed companies. This dissertation is a monograph on the corporate governance from the perspective of ownership structure and governance mechanism. The dissertation is divided into six chapters except for the introduction.Chapter 1 The Fundamental Theory and Mode of Corporate GovernanceThe corporate governance is a set of institutional arrangement of the allocation of the right of control and residual claim. The core is to settle the interest disagreement between the principal and the agent. The principal-agent theory and incomplete contract theory constitute the theoretical basis of the study on corporate governance .On one hand, the separation of ownership and the right of control in modern companies brings about the principal-agent relationship between the owner and the manager. So there is achance of the manager (agent) will not always act in the principal's interests due to the agent's nature of the "economic person". According to the principal-agent theory, the subject of study of corporate governance should be the design of a set of corporate governance mechanisms and related institutional arrangements, which can both restrain the agent's behavior and stimulate his initiative for the principal. On the other hand, the incomplete contract theory tells that in a world with uncertainty the contract is never too complete to include all conceivably possible arrangements of rights and duties. Even though the contractors can construct all the possibilities, it is very hard to tell what they are exactly like. Even though told, they cannot be verified by the contractors and third party (e.g. the court) when occurring due to the ex post asymmetric information. Even though verified by the court, they include too high cost to be enforced. In a word the contract is always incomplete because some matches of rights and duties and related items are not included in it. By the modern contract theory tells the enterprise is in fact a nexus of contracts and the contracts are incomplete. This raises an important question that who will exert the right of control and decision-making when something unexpected by the contract happens. In other words, the belonging of the residual right of control needs to be decided, which is essentially a basic issue of the corporate governance.There are mainly four schoo...