Common Corporate Governance Structure

The low efficiency in public utilities is a generally existent problem in the world.As to improve public utilities' efficiency, researchers care more property systemreform and regulation system reform than improvement of public utilities' efficiencyfrom aspect of corporate governance systematically, and this article expects to do thisjob. On the other hand, our nation's public utilities have being carrying a gradualreform since the middle of 1990S, among which corporate reform is a key point. Thepath and process of corporate reform have di rect relation with general performance ofpublic utilities' reform, while kernel problem of corporate reform is to establish andimprove governance structure so as to be coincided with current situation of economicreform. Hence, this article has significant reference value about how to carry outChina public utilities' reform during transitional period.The article firstly defines public utilities' content and epitaxy, particularly definespublic utilities' scope that will be discussed in the article. And on the basis of this, thearticle analyzes the attribute differences between public utilities and generalcompetitive enterprises, pointing out that the basic attributes of public utilities are:public, network and monopoly.Then in chapter three, the article discusses the theoretical basis of the corporategovernance. And mainly elaborates this from the aspects of corporate governancegenesis, content, organizational structure, mode, ownership structure and effidencyand so on.In chapter four, the article describes the logic link between the commongovernance mode in the theory of stakeholder and public utilities' corporategovernance. By reviewing the concept of stakeholder and its theoretical development,the article describes the rationality and importance for stakeholder to join in thecorporate governance together. It also points out stakeholder's joining in the corporategovernance together can not only make their own legal rights come true but alsoeffectively improve the weak supervision in the agency relationship because they invest special capital into the company and undertake equivalent surplus risk. Basedon this and combined with the public feature of public utilities, the article considersthat the corporate governance in public utilities is more suitable to the commongovernance modes in the theory of stakeholder.In chapter five, the article mainly evaluates current situation in the governancestructure of China's public utilities by empirical research. The first is panoramicallydescriptive evaluation. Based on this and according to public utilities' data partiallylisted on the market, the article analyzes their governance structure from boards,boards of supervisors, ownership, and salary to executives. Then the artide fatherlyanalyzes the public utilities' governance efficiency. Finally, the article summarizesand draws lessons from the experience on the change of governance structure duringthe course of public utilities' privatation in the foreign developed countries. And hopethese will provide reference for perfecting the governance structure of China's publicutilities.In the last chapter two, the article discusses and analyzes the general trail ofChina's public utilities in the economic transformation period. The main policy andsuggestion include: fostering multi-property system mingled with private and foreigncapital based on industry segmentation made by operation characteristics, developingand improving system of board of directors focusing on the stakeholderco-governance mechanism by instructing and stepping Compulsory accumulativevoting system and reducing Condition of carrying-out stock of minority stockholders,establishing a better evaluation system for executives caring positive and negativeincentive effect, reconstructing the evaluation index with more market value indexbased on stake-based Compensation incentive for executives, improving the system ofboard of supervisors by introducing dependent directors, redesigning supervisors'function, performance evaluation system and incentive system of board ofsupervisors, establishing compositive performance evaluation based on stakeholderand so on.There are four innovative points in the article. First, it systematically summarizesthe differences between the corporate governance in public utilities and general competitive enterprises and draws an important conclusion that public utilities aremore suitable to the common governance mode in the theory of stakeholder. Moreover,it analyzes and defines the key stakeholder of public utilities. Compared with formerfragmentary and scattered studies, the study of this article is more systematical.Second, it analyzes the relationship between the ownership structure and theeffidency of the corporate governance through the mathematical mould. It considersthat the concentration of the ownership is better than the separation on the premise oflacking the protection system of the stockholders' benefit, which provide theoreticalfoundation for public utilities to keep state-owned stock in control during the courseof the marketization reform. Third, it analyzes the governance structure of publicutilities and its relation with the company's performance by empirical research, whichplays an important supplementary function to the relevant fields. Forth, it makes anexploratory analysis on the governance structure of China' s public utiliti es on the wayto the marketization from many aspects of policy. Compared with former studies, thepolicy and conception aspects in the article are more systematical and complete.