Object, Efficiency And The Choice Of Governance Structure

The main thoughts of this article focus on the following several aspects: Corporate object must come down to adscription of the corporate dominant rights and efficiency is the result of implementing dominant rights; Corporate goal is a function of the selective behaviors among corporate participants. When the game's equilibrium among corporate participants is achieved, the corporate goal is naturally confirmed. Generally speaking, the goals and efficiencies of varied companies are distinct under different circumstances. If the institutional and market circumstances are affirmed, the goal of a private stock company is to maximize the stockholders' dominant rights. The efficiency rule of a private stock company is to maximize organization rent and value. While the goal of a state-owned public company is to maximize the government dominant rights and its efficiency rule is to keep the value and increment of state-owned assets. One thing worth mentioning is that comparing to supervision costs, this kind of maximum is the one which maximizes the dominant rights under the prerequisite of minimizing supervision costs and maximizing efficiency. Corporate governance structure is a series of contractual arrangements in nature with trust-agent contracts of the board and the operators as its core. Corporate governance structure is decided inside by property ownership structure and corporate property rights structure, outside by institutional and market circumstances. Thus, when constructing a corporate governance structure, its compatibility with the environment must be taken into consideration. Corporate governance structure is the institutional arrangements for effectively realizing corporate objects, namely, who holds the selective rights of the corporate governance structure, whose benefit should be firstly guaranteed. As to the functions of the corporate governance structure, they are to resolve the selective questions of the company managers and to motivate and supervise them. Except for the preface, this article comprises tow parts. The first part is theoretical studies including chapter 1, 2, 3 and 4.The second part is applied research consisting of chapter 5, 6 and 7. Chapter 8 is the part of conclusion and discussion. The preface, as an introduction of this dissertation, introduced the theoretical and practical background of my choice item, revealed the problems, logic thoughts and methods of my study. It also explained some important concepts. The emphasis of my theoretical studies is to build up a systematic and logic framework for investigating the corporate governance structure. Chapter 1 and 2 provide the theoretical bases. Chapter 3 and 4 are the cores of this framework. In chapter 1, I probed into the history of corporate governance, looked back the theoretical clues about corporate governance structure and discussed two problems: one was that adscription of the Corporate dominant rights was corporate rational goal, the other was that corporate governance structure was a series of institutional arrangements which aims to achieve corporate object. Chapter 2 dissertated that corporate goal was a function of selective behaviors among the participants. I based my deduction on the premise that institutional and market circumstances were affirmed and when the game's equilibrium among corporate participants is achieved private stock company's goal was the maximization of the stockholders' dominant rights while its efficiency rule was the maximization of organization rent. Moreover, organization rent maximization equals corporate value maximization and is different from profit maximization. Chapter 3 discussed that corporate governance structure was a series of contractual arrangements, which were inside determined by property ownership structure and corporate property rights structure with the former performing as the basis for the latter, and outside determined by institutional and market circumstances. Chapter 4 expounded that the choice of the corporate governance contract, which aims to resolve the problems of the selection and motivation of the company managers, inclines to cater for corporate object. The purpose of the second part is to put forward applied analysis about the state-owned public corporate governance structure in China based on my theoretical framework. Chapter 5 points out the inside and outside disfigurements of the state-owned public companies' governance structures from the angle of corporate structures' compatibility with the environment, the relationship between the structure of the board and the efficiency of the company, the correlation between stock rights structure and the efficiency of the company, the mergers and acquisitions among public corporations. In chapter 6, I probed into the goal and efficiency rule of the state-ownedpublic companies and made a profound analysis of the government dominant rights style and its efficiency. From this I figured out that the goal of the state-owned public company is the maximization of government's dominant rights while its efficiency rule is to keep the value and increment of state-owned assets. In chapter 7, I proposed a basic logic thought of rebuilding up the governance structure of the state-owned public company in China. Chapter 8 presents the main innovations and conclusions of this study.