The Construction Of Legal Model Of Board Centralism

Corporate governance is a frontier issue in the current theoretical circles.It is regarded as an important theoretical and practical issue in the area of economics,law,management,sociology and other disciplines.In the study of corporate governance in China,jurists consider ‘Stockholders' Meeting Centralism' and ‘Board Centralism' as the core paradigms in the research of corporate governance system.However,there is no consensus on the exact connotation of the two central doctrines and their relationship.There is also a big controversy about what is more superior and more consistent with the development tendency of the corporate system.The theoretical controversy even causes some degree of troubles to the system construction and practical choice of corporate governance in China.The corporate governance research in China is in the ascendant.There are lots of expert studies focused on the reform of state-owned enterprises,the corporation control contests,the institution of independent directors,the information disclosure of listed companies and many other issues.The corporate governance in China still holds traditional Stockholders' Meeting Centralism in its structure,and sticks to the relatively conservative shareholder primacy in its idea.But the structure and idea virtually limit the prosperity of capital market and the quality of company governance in China.On account of market demand,value orientation and other factors,Chinese corporate law is urgently need to study from American corporate law,introduce the structure of Board Centralism and build a Board Centrism governance model.By taking ‘the legal model of Board Centrism' as the research object,the paper learns from the existing research results of law,economics,management and other interdisciplines,excavates deeply theory skeleton of Board Centralism and summarizes the successful experiences of the major developed countries in the construction of the model of Board Centrism.Moreover,thinking about the practical needs of corporate governance,development trend of international corporate governance and institutional path-dependence in China,the paper applies to explore the construction of legal model of Board Centralism and provide a model for corporate governance reform in China.In addition to the contents of the literature including literature review and other contents,the paper is divided into seven chapters.The first chapter is aimed at clarifying the theoretical basis and defining the connotation and extension of Board Centralism.The concept of corporate governance originate from the study of economics.Because of the pragmatic concept in economics,the corporate governance doesn't form a widely accepted definition which lets to the confusion of the concept of Board Centralism.Through the literature arrangement and extensive interpretation,actually,there is different interpretation to the structure of corporate governance,the model of corporate governance and the idea of corporate governance.Meanwhile,Board Centralism is mainly applicable to the listed companies and other public company.The studies of corporate contract theory,stakeholder theory,incomplete contract theory and political democracy theory strengthen the core theory of Board Centralism.Among them,the theory of entity maximization is the best model to explain the idea of Board Centralism.In the same time,aiming to settle the disputes on ‘who is the center of the power of company',the paper clarifies and analyzes the argument between Stockholders' Meeting Centralism and Board Centralism and compares them with so-called Managers Centralism and Shareholder Activism.In this basis,the paper analyses the internal relations and differences of the various theories and certifies the advancement of Board Centralism.The second chapter takes the structure of Board Centralism as the research object.Firstly,through the research on the origin of corporate governance,the paper considers that the corporate governance does not start from the separation of ownership and control,but the formation of the corporate system and the establishment of corporate personality.Clarifying the historical development of the structure of Board Centralism,the paper concludes that it is a general trend of the change of the governance structure from Stockholders' Meeting Centralism to Board Centralism.Secondly,based on clarifying to the historical development of Board Centralism,the paper observes and clarifies respectively the historical evolution of the governance structure of Board Centralism of Germany,the United States,Japan,the United Kingdom and other major developed countries in legislation.And the paper summarizes the influencing factors on the establishment of governance structure of Board Centralism,such as the market,the system and the social factors.The third chapter analyzes the necessity of building a governance structure of Board Centralism in China.The governance structure of Board Centralism is not only the development trend of international corporate governance,but also have great positive effect on the social and economic development of a country at both the macro and micro levels.First of all,it lets to the changes of concept of company law from shareholders' interests primacy to the social welfare primacy and strengthen the idea of corporate autonomy and interests balance.In the second place,the establishment of the governance structure of Board Centralism greatly stimulated the market creativity.And it is significant to the prosperity of the knowledge economy and the maturity of the securities market.Besides,the establishment of the governance structure of Board Centralism will deepen the understanding of the corporate governance,and thus make the company law more perfect on the clauses of the directors' obligations and the information disclosure system.In China,the traditional governance structure of Stockholders' Meeting Centralism lets to the inefficiency of company decision-making,the serious phenomenon of large shareholder control,the unclearness of power allocation of shareholders' meeting and board of directors and the incompletion of external supporting system.It is imperative for Chinese company law to realize the change from the governance structure of Stockholders' Meeting Centralism to Board Centralism.The fourth chapter focuses on how to construct a Board Centralism model in line with the development needs in China after establishing the governance structure of Board Centralism.In various countries building a same corporate governance structure of Board Centralism,they have established different characteristics of choice of corporate governance because of different economic development path,political and legal systems and social and cultural traditions and other factors.The common model of Board Centralism can be divided into the American model,which is typical,and the German model,the Japanese model,the British model and so on.The China's choice of the model of Board Centralism should rationally learn from the experience of foreign mature governance model,give full consideration to the convergent trend of corporate governance,the path dependence and the reality requires of corporate governance in China.In the fifth chapter,from the perspective of the construction of the legal system,the paper discusses the institutional construction of the governance model of Board Centralism in China.It mainly involves the internal organization settings of company,the distribution of company power and other problems about governance structure.Firstly,the system construction of the model of Board Centralism in China should be clear that the board is the subject of corporate governance.It should be the representative of the company's will and the subject of corporate governance.And it enjoys a wide range of powers and independence.Secondly,the legislation should give the board of directors a wide range of powers authorizedby law and articles of company,and the company's surplus power.Thirdly,it should insure that the shareholders' meeting have essential power,such as the power of formulate and amend the articles,the power to elect and remove directors and the power of consent to significant matter.At last,considering the demands of practice in China,the functions of board of supervisions should be guaranteed.The sixth chapter,focusing on the efficiency of governance structure of Board Centralism,makes a detailed planning to the exercise of power,the allocation of internal power and the obligations and responsibilities of directors.Unlike the requirement of corporate governance,the internal arrangement of the board generally doesn't need to provide in law but to record in code of conduct of corporate governance written by regulatory authority,industry association and research institute.In order to guarantee the efficiency of the structure of Board Centralism,the code of conduct should emphasize the importance of group decision making in the board,configure reasonably the proportion and function of the insider directors and outside directors and authorize the managers cautiously.Besides,the obligations and responsibilities of the directors are also important elements of the code of conduct.The seventh chapter discusses the external-environment construction and supporting of the model of Board Centralism in China.It includes the construction of market of professional managers and the managerial human resource,the promotion of social morality,the construction of social credit system,as well as the external legal system construction of information disclosure,corporate acquisitions and investor protection.