Study On The Employees’ Right Of Corporate Governance

The differentiation on the understanding of the essence of company gives birth to varied conclusions on the relations of corporate governance by the state, shareholders, employees, and other corporate insiders. Having analyzed both the essence and fundamental features of company, we learn that the company, by law, is an artificial entity. Shareholders assume the risks on authorization while they transfer other legal risks to stakeholders systematically. It indicates that the state can take measures to improve the corporate systems. In terms of economy, the company is actually a contract-based economic organization, which shows that the key part of corporate governance is to allocate corporate interest among a variety of transaction subjects. And it is possible to make both the owners of corporate interest and those of human resources the subjects of corporate governance, which lays an economic support accordingly. The legal personality, limited liability, unlimited transfer of shares, operation management authorized by board of directors, and ownership of investors of the company imply logically that there are varied conflicts in themselves, and all of them serve the shareholders from the viewpoints of embryology. Therefore, there are indication that corporate governance shall not work against the key role of shareholder interest, and that shareholders may take advantages of the company with prejudice to others, which provides for the premise and approaches to analyses the scope of corporate governance. With the rapid development and adjustment of science and technology, and economy, and the society, the state shall govern the corporate governance from outside the company by promoting the balance and stability of both the corporate efficiency and social expectations.Corporate governance is the allocation of rights and obligations between the state and corporate insiders. Corporate governance includes internal governance and external governance. Nevertheless, external governance shall be compulsory allocation by the state legislatures instead of outside market. Corporate governance embraces corporate control and residual claim. Corporate control works upon the both personal and physical capital as well as authorization by contracts under corporate management. And corporate control meets the requirements of state policies and can allocate corporate governance. The residual claim rests upon either corporate control or statutory provisions. The employees’right of corporate governance is nothing but the composition of the democratic governance of employees, and it is confined to the employees’rights of corporate control and residual claim as a result of the capitalization of human resources. Hence, the employees’right of corporate governance shall be defined in respect of company law instead of ideology.Among the various sorts of related interest, corporate social responsibility and stakeholder theory turn out to safeguard shareholders’right and interest, and duly take account of stakeholders’interest from the viewpoint of ethics. The necessity of the employees’right of corporate governance is justified by the nature of the capitalization of human resources justifies as well as the exclusion of human resources, their impartibility to the human beings themselves, and the incompletion of the employee contract. In fact the employees’right of residual claim is legislated or governed actively and differently in many countries by fundamental means of incentive salaries, ESOPs, and service contribution. The considerable difference lies in the employees’right of corporate governance. Because the employees’right of participation in making decisions rests upon the compulsory provisions in a country, the double corporate governance system conforms well to the requirements of the company; which helps the employees make joint decisions in the company and balance the corporate efficiency. In such a socialist country, the people shall enjoy the constitutional rights of governing the economy and participating in democratic management in the companies. Centered on human resources, the employees are the backbones of the economic development in the country. So it is necessary to construct a partnership platform that is composed of employees and other related subjects. The advancement of both the economy and society facilitates employees’control of economy under safe and sound conditions. Chinese traditional Confucianism and corporate social responsibility, and the stakeholder theory all achieve the same effect. Therefore, it is of necessity to introduce employees’right of governance from the point of view of knowledge-based economy and competition for talented people.With a view to establishing the employees’right of corporate governance, the capital of human resources, as is illustrated by German mode, shall be defined from the viewpoint of economy instead of ideology. Furthermore, the principles and approaches shall be made clear in relation to the employees’right of corporate governance. In detail, much shall be done to establish employees’right of corporate governance. Firstly, measures shall be taken to reform the system of board of directors, supervisors committee, adding the number of employee supervisors and adjusting the relation between board of directors and supervisors committee. Secondly, the company, directors, and supervisors shall be liable for violation of the policies on employees’right of corporate governance in hopes that the right to know the truth, inquiry, and the system on collective bargaining shall be reiterated among labor union or employees’representative congress. Thirdly, measures shall be taken to encourage employees to become shareholders. Researches shall be done on ESOPs, and service contribution. Fourthly, labor union shall be oriented again to perfect the procedures for employee representatives to participate in corporate governance. Exploration shall be made into the methods, scope, and process of making decisions within a company by representatives of employees in hopes that labor union shall be made prop for safeguarding the employees’right of corporate governance.