Collusions In Supervising And Monitoring In Corporate Governance

This dissertation addresses the effects of explicit or implicit collusion on corporate governance (CG) system. In other words, it focuses on that how the balancing institution arrangements of CG will react felicitously to the explicit or implicit collusion.Collusion, in popular speaking, means a secret agreement between two or more agents for a fraudulent, illegal, or deceitful purpose, which is harmful for principal. As a monitoring and balancing system, corporate governance faces a lot of collusive behaviors. Many collusion facts such as board-management collusion, financial cheating, and audit collusion show that, in this counterpoise system each agents can collude with the others for their private benefits at the costs of investors especially outside investors. However, the theoretical research on collusions in CG is very few, because the organizational collusion theory is absence in CG research fields, and economists from economics of organization pay little attention to collusion in CG. This dissertation tries to apply the theory of collusion to analyze the collusion phenomenon in CG fields, and tries to find out the appropriate institutions arrangements of CG.This dissertation studies three themes from pure economic theoretical angle. The first themes is how to design the compensation for independent outside director; the second tries to explain why some countries choose one-tier CG system while the others choose two-tier CG system; the last discusses how to deter the audit collusion. The research angle is from collusion theory for each theme.For the independent outside directors'compensation system, there are two different views in academe. One of the two views claims that the fixed compensation is more suitable, because it is helpful for keeping the"independence"of outside director. The other view is contrast, and it protests that the incentive compensation is much better, because the agency theory tells us one who has few benefits in company will do not care the company. The model in this paper shows that, the fixed compensation is more suitable while there is a strong reputation market for directors; if reputation market is weak, and law protection of investor is good, fixed compensation is also a wise choice; however, it is necessary to establish collusion-proof incentive compensation with weak reputation market and bad investor protection. In our china, the fact is just the last case.For CG model selection, a well-known fact is: there are often good protections of...