The Study On Corporate Governance And The Protection Of The Rights And Interests Of Small And Medium-sized Shareholders

Although many prominent achievements in developing scale and developing speed have beeen made since China Security Market was established,the rights and interests of small and medium-sized shareholders have been usually expropriated by large shareholders in this market.As a result,a lot of small and medium-sized shareholders have nearly lost confidence in China Security Market and the base of the market has been seriously undermined.As regards the current situation,firstly,the author of this paper gives some therotical explaination on the intrinsic reason and the external condition of the damage of the rights and interests of small and medium-sized shareholders by using agency theory and the transaction cost theory. Moreover,the author summarizes the research of propection about the rights and interests of small and medium-sized shareholders home and aborad.Secondly,the author of this paper generalizes the essence and the function of corporate governance.Then the author deeply analyses not only the tight relationship between the internal corporate governance mechanism(including the structure of shareholder's rights,the system of board) and the protection of the rights and interests of small and medium-sized shareholders,but also the tight relationship between the external corporate governance mechanism(including the legal institution of stock market,the system of information disclosure,the regulation of stock market) and the protection of the rights and interests of small and medium-sized shareholders.By constructing the founctional model connecting internal and external corporate governance on the protection of the rights and interests of small and medium-sized shareholders,the author strictly proves that it is helpful for the connection of internal and external corporate governance to improve the protection of the rights and interests of small and medium-sized shareholders.Thirdly,from the viewpoint of internal and external corporate governance,the author analyzes the current state of the protection of the rights and interests of small and medium-sized shareholders in China Security Market.Then the author explores the structure and essence of private benefit of control,defines the route of snatching private benefit of control enforced by large shareholders.By using the utility function model,the author proves the intrinsic principle of the expropriation taken by large shareholders.At the same time,the author explores the main route of the expropriation taken by large shareholders,including security fraud,illegally occupying capital of listed company and unfair associated transaction.After empricially studying the extent of the expropriation taken by large shareholders in China listed companies,the author compares the extent of the expropriation among the main countries all over the world and draws a conclusion that the extent of the expropriation taken by large shareholders in China listed companies is severe.Subsequently,from the three layer including internal or external corporate governance and the connecting of internal and external corporate governance,the author demonstrates that internal corporate governance exists defects and external corporate governance still exists flaws.Moreover,internal and external corporate govemance don't connect tightly in different stage of the protection of the rights and interests of small and medium-sized shareholders.Eventually,the author concludes that the defects of internal or external corporate governance and the disconnecting of internal and external corporate governance result in the damage of the rights and interests of small and medium-sized shareholders. Combining the practice of China corporate governance,from the viewpoint of compensating internal corporate governance,improving external corporate governance and tightly connecting internal and external corporate governance,the author accordingly proposes some policy strategys on how to improve the protection of the rights and interests of small and medium-sized shareholders.