Corporate Governance In The Spirit Of Harmonious Society

The issue of corporate governance reaches into a wide array of disciplines, including politics, economics, law, sociology and culture, etc.However,the studies on the topic were often aimed at maximizing profits and confined within the economic domain. Meanwhile, legal research is often based on branch laws and focuses on specific issues, including the protection of minority shareholders'interests, the mechanism of independent directors and the role of institutional investors. With the development, scholars intend to expand the connotation of the concept of corporate governance and to incorporate interest related parties into the concept of corporate governance from the society responsibilities of corporate.This dissertation argues that research on corporate governance should go beyond legal or economic considerations and take into account its political and cultural implications. As"building a harmonious society"has become a common understanding both in people's daily life and in China's regulations, the ideal has also become the most relevant political and cultural tenet of corporate governance. Companies are the most important base components of the modern economy, and therefore, corporate governance in the spirit of"harmonious society"is a fundamental step towards the target. Corporate governance in the spirit of"building a harmonious society"is aimed at achieving both internal and external harmony of a company and promoting the harmonious development of individuals, companies and society as a whole. Under such circumstances, we need to broaden the horizon of the research on corporate governance and fully explore the political and cultural resources in this regard. We need to improve China's corporate governance system, improve the realization mechanism of corporate governance, clarify legal relationship of all parties concerned and systematically re-shape theories and systems of corporate governance so as to improve corporate legislation and set up modern enterprise models.The dissertation consists of 4 chapters, with the contents of each chapter as follows:Chapter one lays a theoretical foundation for the research on corporate governance. First of all, the concept of corporate governance is defined and explained. In this dissertation, corporate governance refers to the system and framework by which to manage and control a company. The underlying philosophy is to optimize relations among the management, board of directors, shareholders and relevant stakeholders, adopt effective supervision and incentive systems, make better use of available resources, improve efficiency and promote, balance and realize interests of the company, shareholders, other stakeholders and society as a whole. The dissertation then analyzed the main patterns of corporate governance in order to provide theoretical references for China's corporate governance. Corporate governance models vary in different countries as a result of certain constraints as well as economic, social and cultural backgrounds. Examples include the market-discipline model in the UK and US, the internal monitoring model in Germany and Japan and the family control model in the East Asia. Basically, all patterns follow the principle of checks and balances between decision-making, implementation and supervision, but they differ in terms of institutional structure and power allocation. The dissertation goes on to give a general explanation of the research methodology, providing a framework for analysis in the following chapters.Chapter Two analyzes the internal harmony of a company, namely, how to achieve harmony between stakeholders within a company through internal allocation of powers and interests. Power allocation within a company is stipulated in the Company Law and structural provisions in the article of association. The allocation of interests and the structure of legal relationships are core issues in corporate governance and should be handled under the principle of harmony so as to manage the relationships between shareholders and the company, among shareholders, between directors and management. In so doing, the internal corporate harmony will be improved, including internal harmony of General Meeting, internal harmony of Board of Directors, harmony between General Meeting of stakeholders and Board of Directors, harmony among Board of Directors, shareholders and management. Moreover, the supervision function of Supervisory Committee should be strengthened.Chapter Three addresses the external harmony of a company, analyzing the connotations, extension and mechanisms of corporate social responsibility (CSR). From a legal point of view, corporate social responsibility refers to obligations of a company to promote socio-economic development, protect the environment and enhance public interests under a given economic and legal background. The connotations, extension and mechanisms of corporate social responsibility are all defined by the specific culture and values of the host country. As production and trading become social activities, the social and public nature of a company decides it can not put profit as its only goal. Companies are increasingly social players. Interaction between companies and between companies and society are inevitable during the existence of companies. Growth of a company relies on cooperation of and support by stakeholders including creditors, consumers, suppliers and local residents. More importantly, corporate actions of a company bear an inevitable impact on such stakeholders, and therefore, companies shoulder inescapable obligations to the stakeholders. To ensure companies honor social responsibilities, legal mechanisms should be designed to help stakeholders supervise and rein in corporate actions. To achieve harmonious corporate governance, companies should take responsibility, trustworthiness and integrity as their core values and fulfill the following commitments: to honor legal obligations to creditors, safeguard the reputation of company and creditors'interests; to protect consumers'rights and interests; to maintain relationship with local residents; to protect the environment and promote the harmony between man and nature; to establish a human-oriented operation philosophy and protect workers'rights. Legal mechanisms should be set up correspondingly to incentivize companies to fulfill their social responsibilities.Chapter Four addresses the self-discipline and remedy mechanisms of corporate governance and corporate harmony. Whether a company can achieve both internal and external harmony depends partly on its self-discipline and especially on the availability of effective mechanisms of correction in law as well as effective mechanisms of mediation, remedy and dispute settlement. Therefore, smooth corporate governance relies on effective correction and remedy mechanisms.