Legal Institutions Research On State-Owned Company Governance For Operator Control

The separation of ownership and control naturally exists in State-Owned Corporation governance. Premised on management control in State-Owned Corporation actually, controlling managers to perform their duties practically becomes the key to solve State-Owned Corporation governance problems. The essay starts from invalid of operator control law institution and reasonable factors put forward the problems and countermeasures. The conclusion includes:State-Owned Companies are market objects, operator control law institution should construct under market rules, and commercial State-Owned Company should be classified legislation based on representatives of investors' reform, which could achieve state-owned operator control institution marketization. The dissertation includes 6 parts:The first chapter is introduction. It contains the research origin, controlling State-Owned Company operator present situation, research ideas and research methods, and the main concept margin in this essay. The concept of operator is emerging with the separation phenomenon of ownership and management of corporate governance, operators contain company's management board of directors, executives and other senior management personnel corresponding to the shareholders of State-Owned Company. State-Owned Corporations comprise public enterprises help the government to perform specific functions, and general company focus on business and profit. This article mainly solves general State-Owned Company governance issues. The concept of State-Owned Company is generally refers to the commercial State-Owned Company in this paper.The second chapter is the theoretical basis of controlling State-Owned Company operator legal institutions. The basic theory construction is separation of ownership and control, principal-agent theory and the human nature theory. These theories imply that the core of State-Owned Company governance system should be controlling operator institutions. It becomes a difficult problem for State-Owned Company to control operators effectively since the government proprietors out of duties as investor representative due diligence, principal-agent chain too long, Chinese traditional culture ignore human weaknesses adverse effects on the construction of law in State-Owned Company. These effects result controlling State-Owned company operators efficiently.The third chapter analyses the current situation and problems of controlling State-Owned Company operator institutions. China government has established a system of controlling operators including supervisory mechanism, incentive system; restrain system and performance evaluation system initially. For example, besides the SASAC, the board of supervisors, the board of directors, independent directors of the Listing Corporation, company party committee and commission for discipline inspection are supervisory bodies; operators incentive table contains reward, reputation, and administrative promotion at the same time; operator duties and responsibilities institutions have set up as constraint system; Although China "company law", "the enterprise state asset law" and other laws fail to define State-Owned Company manager performance evaluation measurement standards, but state SASAC and local government SASAC formulate the operator performance evaluation measures separately, governments are playing performance evaluation role identified as the principal of state-owned assets. But Chinese controlling State-Owned Company operator system still exists many problems in corporate governance:multiple supervision mechanism, overlapping and authority unclear, result no one play supervision role comprehensively; operator's short behavior implemented by the government administrative promotion easily, compensation incentive not associated with true salary level, unreasonable salary structure, insufficient incentive and encouragement over problems; the operator's duty and responsibility restraint system empty; the selection and appointment of managers generate by department of government and Party committee of administrative assignment which should be generated by board of directors in company law, resulting operators candidates are not from manager market; government as representatives of investors role and public administration function make it impossible to perform the duties of State-Owned Company manager performance evaluation on scientific and objective.The fourth chapter discusses what causes the problems of controlling operator legal system. Controlling State-Owned Company operator come to nothing in practice, could be reasonable by legislation design unscientific, but also caused adverse effects on the corporate governance system by market environment and political system. The legislation of our country takes the government as State-Owned Company represent investors, because the government staffs are not direct beneficiaries of state-owned assets of State-Owned Company, they do not exist the residual claim right, therefore government distain to evaluating operators' performance scientifically, lack of driving on effective supervision, incentive, constraint for company operators. The core problem of operator control failure in commercial State-Owned Company is system design and operate environment against market discipline. First of all, government as equity represents is difficult to target on profit for the purpose of selection, supervision, incentive, constraint operator; secondly, controlling operator institutions do not comply with market discipline, such as State-Owned Company manager is selected by government departments and payment unattractive which resulted the failure of reputation incentive and restraint mechanism; State-Owned Company supervision rights led to the government, leading to the board of supervisors easily according to the government's administrative rules instead of market supervision rules for operators acting; independent director lack of market-oriented incentive system, result no power improving corporate governance and internal supervision; finally, the State-Owned Company administerization environment effects controlling operator system implementation, operators are appointed by government make manager resource market unfair competition, some social functions and policy burden of State-Owned Company also make the operator performance cannot be appraised horizontally.The fifth chapter discusses perfect design of control institutions with State-Owned Company operator. The core of the State-Owned Company operator loss control is governance system should improve and solving the problem of out of control market-oriented. The nature of government and SASAC institution, the government staff behavior and public identity perform incompatible with their income or company performance. The board of supervisors works under government policies, far away market regulations; lack of incentive system result independent directors' slack on governance improvement and supervision inside. Environment of state-owned companies is out of market, professional managers market is un-official, effects on operator control offside. As the main players in competition market, governance institutions should be designed under market rules, therefore, re-construction of governance especially operator control must target on market rules. Shareholder representative shall be market-oriented is one of solution. But the administration characteristic of SASAC is main barrier. State-own shareholder representatives are private rights, which mean it could run formally in market. Therefore, de-administration of SASAC is a good choice. Classification of legislation is the premise of commercial State-Owned Company governance system and controlling operator institutions properly. Chinese State-Owned Corporation exists as commercial subject company and public strategic function company. Our country sets relevant policies and legislation but not on classifications by types of State-Owned Corporation, often cause public goals and measures apply on commercial state-owned companies, and result in commercial State-Owned Companies unable operate market. Therefore, classification of legislation is the premise of commercial State-Owned Company function scientific positioning, but also the premise of commercial State-Owned Company governance system and controlling operator institutions properly. Based on these premised conditions, operators' incomes, choose and appoint, performance evaluation could be achieved.; more scientific and perfect supervision system for controlling operator of State-Owned Company including supervision, restraint, incentives and performance evaluation market-oriented can be applied.The sixth chapter talks about conclusion of essay and other suggestions. Controlling operator system of state-owned company failure caused by both institutional reasons and environmental reasons. We should improve State-Owned Company governance social environment actively, in order to provide benefit conditions for the control operators' system play.