A Study On Corporate Governance

Corporate govemance evolves with the development of the modem enterprise.Traditiona1 owner-run enterprises can't cope with or even never met such problemsas the scales of modern enterprises, technology advancement, opportUnities andrisks brought by intense comPetitiory the significance of the establishment ofcorporate Strategy and the efficiency of internal resource allocation So, al1 thesegive rise to the aPpearance of professional managers and managers' market and themanagement science is experiencing a revolution The "agent problem' evolvesfrom the substitution of professional managers fOr the owner in controlling theenterprise Principals and agents have different goa1 option and value orientationfrom the perspective of economic rational hypothesis. Corporate govemance targetsthe problem of the corresponding systematic arrangement of the tWo contractingparties to ensure the principaIs' rights and avoid the abuses of agents.The theory of corporate governance stems from abroad in l9705 and l980swhen a lot of researches in the area were conducted in developed countries. Thepractical background fOr the climate of these researches is as fOllows. Theinternational comPetitiveness of US companies declined and American scholarstried to find differences from Germany and JaPan in corporate govemance.Stockholders were unsatisfied with the high-level management rewards especiallywhen the rewards were unrelated with the performance of the enterprise. A surge ofcorporate mergers swept the US nation wide, in which the hostile buying harmedthe stocAnolders' interest. The core research in the phase was to proteCt thestockholders' interests. From l990s, the researcb fOcused on the roles thatinstitUtional investors and stakeholders play in the corporate govemance,transnaionaI corporate govoce and human caPital theories under the knowedgeeconomy. The praCtice and research are linked in the area of corporate govemancein western coUnries. Some nations established corporate regUlations tlia adaPt totheir economic and political system caPital market and humtrity enVironment.Some giant corporations also devoted to the research and pracice of corporategovemance, which contributed a lot to the hoprovement of internationalcompetitiveness of the corporation and the prosPerity of their nations.The research of corporate govemance in China began from 1990's. In theprocess of transferring to the market economy the establishment of the modementerprise system to which the corporate governance is the core, becomes astrategic goal fOr the refOrm of state-owned enterprises. Many stated-ownedenterprises established a formal" modem enterprise system' in the sense of legalarrangement, however, the operating system adapted to the market economy is stillon the w'ay So we need to strengthen the research on the corporate governance tofOrmulate good corporate governance to promote the core competence of theenterprises Aner China's entry' into UTO, we need to imProve the corporategovemance to cope with the intense international competition. To improve thequa1it}' of the listed company, as the president Shout Xiaochuan of CSRC pointedout as the most cha1lenging prob1ems faced by the securities market, depends on theimprovement of their corporate governance. What's mQre, Corporate govemance isnot only related to the specific comPany, but also to the stability of the financia1system, economic groWth, global capital allocation and finally the wealth andwelfare of the whole nation The researcb based on the experiences of the corporategovemance in market economics, is of great significance fOr the reform of thestate-owned compboes and the establishInent of modern enterprise system.Absorbing and referring to the results from both praCtical and academicresources, the thesis does some research on the connotation of corporate governance,the intemational surge of the research and its background, the corporate governance...