Research On The Impact Of Political Governance Of State-owned Enterprises On Board Decision-making

The political governance of state-owned enterprises means that the party organization participates in the corporate decisions through "two-way entry and cross-appointment" with the board of directors,board of supervisors and managers and "pre-discussion”,so as to form a corporate governance arrangement with Chinese characteristics in state-owned enterprises.In the new period,the reform of state-owned enterprises in China requires strengthening political governance,establishing corporate governance structure and perfecting modern enterprise system.Moreover,it clarifies the way and scope of rights for Party organizations to play a role in state-owned enterprises,that is,to participate in corporate governance in the way of "two-way entry and cross-appointment",and regards the discussion of Party organizations as the pre-procedure for major decision-making issues of state-owned enterprises(i.e." pre-discuss ").However,due to the constraints from the government and the market,and the responsibilities of politics and economy,it is difficult to effectively integrate the two institutional arrangements of political governance and corporate governance.And the mechanism of cooperation between Party organizations and other corporate managers needs to be further clarified.Therefore,focusing on the important corporate governance arrangement of "two-way entry and cross-appointment" between the party organization of state-owned enterprises and the board of directors,and based on the announcement of the board resolutions of listed companies,this paper mainly examines four issues through the voting of board members in board meetings : Firstly,the relationship between political governance(Party organization)and other governance subjects(administrative governance and economic governance)of state-owned enterprises,and the coupling governance framework of political governance,economic governance and administrative governance of state-owned enterprises.Secondly,it studies the micro-mechanism of political governance of state-owned enterprises,that is,the influence on the decision-making process of the board of directors.According to the background of Party organization,the board members are divided into political directors and economic directors.This paper examines the dissent of political directors to board proposals,and the influence of directors' government background,professional background and practical work experience on their dissent behavior.Thirdly,it examines the influence of the two-way entry and cross-appointment on the decision-making of the board of directors,and the difference of this influence in different corporate governance situations.Fourthly,it examines the impact of political governance on the corporate value,the intermediary effect of board decision-making,and the moderating effect of regional marketization in this process.The results show that: Firstly,in the coupling governance framework of political governance,administrative governance and economic governance of state-owned enterprises in China,it should base on the economic governance that follows the law of market.Political governance should play the role of leading core and political core,and administrative governance should rely on the "authorized management system of state-owned capital”.Secondly,compared with economic directors,political directors are less likely to dissent,but if political directors have strong motivation for promotion,or have professional background,or have practical experience,they will also dissent.But directors with government background are less likely to dissent.Moreover,the dissents of political directors are also different in different types of proposals.Considering political logic and political responsibility,they tend to vote against large-scale investment,asset changes and other matters that may cause the loss of state-owned assets.Thirdly,the "cross-appointment" between the Party organization and the board of directors of state-owned enterprises,especially when the Secretary of the Party Committee and the chairman of the board of directors are held by the same person,it is more likely to dissent.Moreover,this influence is negatively moderated by“enterprise performance” and positively moderated by “pyramid level”;however,after pre-discussion,the Party Committee prevents some politically problematic proposals from entering the decision-making process of the board of directors,improves the decision-making efficiency.As a result,there are fewer dissenting opinions in the decision-making process of the board of directors.Fourthly,the Party organizations participate in corporate governance can ultimately enhance the value of enterprises.Empirical results support the positive impact of political governance on corporate value and the mediating role of the dissent.This paper focuses on the micro mechanism of the political governance of state-owned enterprises,that is,the impact on the decision-making process.It is of great significance to improve the governance theory of state-owned enterprises with Chinese characteristics and explore how to integrate political governance with economic governance and administrative governance.Moreover,in practice,it can provide support for the political governance of state-owned enterprises to play the role of " control the direction,manage the overall situation,and protect the implementation " and enhance the value of state-owned enterprises,and implement the political leading role of Party organizations into the decision-making process,so as to provide reference for further reform of state-owned enterprises.