A Preliminary Study On Corporate Governance Of Construction Industry Firm In China

Today Chinese construction industry firms have many problems. Since the collapse of the so-called realty bubble economy, those companies have been working to overcome their sluggish performance by means of reforms in business management strategies. While corporate earnings have begun to recover to some extent, returns on assets and other indicators of profitability are still hovering at very low levels, suggesting that structural reforms in business management are far from satisfactory. Recent slumps in the stock markets also suggest that investors are still disappointed over the delays in corporate structural reforms. The discussions on the need for such reforms have been fully exhausted, and the time has come to actually start carrying them out.This paper is based on the management literature on corporate governance and constructional firm. Although a legal requirement for many organizations, boards are also an endogenously determined governance mechanism for addressing agency problems inherent to many organizations. Formal theory on boards of directors has been quite limited to this point. In this paper I first introduce the theory of corporate governance, then analysis the difference characteristics of corporate mode, such as in Europe and the United States, for example, such reforms were achieved under outside pressure, especially shareholder governance. Secondly, I study the history of Chinese construction firm and its characteristics. Finally I have some advice about the firm corporate with the theory of corporate governance, Rebirth of Chinese construction firm companies must be through governance reforms.The paper has two lines: one is the changing of corporate governance theory; another is the working and profitability compared of different construction industry firms. In the first line, the author introduced the development of the corporate governance theory, such as: board of directors, independent director and power of man. In second line, the author had compared two similarcompanies. The company is: Shanghai construction group (SCO) and Wuhan construction group (WCG). The two companies have same history, same changing, same object, and same reform mode. But they have different result. All about this is because of the different corporate governance.At the final of the paper, the author has some suggestions for our construction industry firms.