The Improvement And Perfection Of Corporate Governance In China

The competition among enterprises is also the competition among their governance. If any enterprise, whatever ownership it belongs to, wants to survive and develop in the market competition, it has to perfect its governance system. Otherwise, the one with poor governance will lose and be wiped out The fact the corporate enterprises and owner-manager enterprises have coexisted for a long period of time just shows that either of these two types has its own advantages in their governance. At the same time, they take in the advantages of the other type so as to overcome their own defects or disadvantages. The establishment of the shareholding system in the state-owned enterprises is also the result of market competition. However, the original purpose of such reform was to get them out of their dilemma and difficulties, not to reform their property right, thus resulting in the absolute dominance of the state-owned shares in the ownership arrangement. Consequently, the reform of the shareholding system just solved the problem of floatation of loan of these enterprises. The problem concerning governance remain unchanged. The purpose of my paper is to give suggestions on how to solve the problems of concerning governance in state-owned enterprises.Many kinds of points of view have been expressed on the improvement and perfection of governance in the state-owned enterprises. My research commences with the probe into the fundamental causes of the inefficiency of the publicly-owned enterprises. A conclusion that such inefficiency is due to their non-market contracts is made based on the research. And it's made clear that the reform of property right is a right way of the state-owned enterprise reform. Then, different kinds of mechanisms of corporate governance are explored. These mechanisms can be classified into internal and external governance mechanism. As far as the state-owned enterprises are concerned, both the internal and external governance mechanisms are im^e^n籺f. thus resulting in the ulterior control. The fundamental cause of the interior control lies in the vacancy of owners and the vacancy creditor. So, an efficient way to improve the corporate governance is to get the state-share holders replaced by the real shareholders.3The reduction of the state-owned shares has been agreed on, but how to reduce it (an effective scheme) is still on its way. Moreover, the state-owned shares are of great proportion, and it's reduction needs a long term. In the course of this reduction, one way to deal with the lack of the real supervision from owners is to get managers to supervise themselves------managers hold shares in certain proportions.The paper is divided into five chapters:Chapter 0 is the preface which concerns the research angle, methods and my major points of view.Chapter one is mainly about enterprise theories. By means of the research on the enterprise theories, the nature of enterprise and the characters of the state-owned enterprises are made clear.Chapter two involves the disputes and disagreements on corporate governance with respect to the definition of corporate governance, the aims of it ,the property-right theory and the ultraproperty right theory as well as the question whether capital employs labor or labor employs capital.Chapter three attaches special importance to different kinds of mechtcjsms of corporate governance, the conditions of these mechanisms to play their poles and their interrelations. It gives the present situation of the corporate governance of the state-owned enterprises. Then it is pointed out that mangers' holding shares is a practical and effective way for the improvement of it.Chapter four expounds and proves that the best way of motivating managers is their holding shares, and their holding shares is helpful to the reduction of the state-owned shares.Chapter five is the conclusion of the whole paper.There is something new hi my paper which is:Firstly, that the inefficiency of the publicly-owned enterprises lies hi the their-non-market contract...