The Analysis Of Family-Oriented Corporate Governance In FH Company

China 's private sector has been growing rapidly along with the establishment of market economy. More and more family businesses came forth and have been developing at a stunning speed during the past decade. Nowadays, the financing , succeeding of ownership, clerk inspiring mechanism, adverse selection and oral hazard about the family enterprises have been hot topics. In fact ,these topics all involve the family-oriented corporate governance.This paper makes a thorough study of FH Electric Company. It makes some common analysis of family-oriented corporate governance first. Then based on the data and materials coming from the administrative consulting to FH company, we point out some problems of property rights system, organizational structure, mechanism of decision and inspiration in this company, which break out during the development from a small business to a relatively large company , from an extensive expansion to an intensive operation. The paper gives some suggestions to reform polices about capital structure and corporate governance , trying to reveal the development rule that all family businesses follow in common.This paper is divided into five parts.The first part gives some explanations to the conceptions such as family corporation, capital structure and corporate governance to establish the family-oriented model of governance. Then we compare this model in China with that in Korea and other countries in Southeast Asia.The second part provides a profile of FH company. Based on the introduction of FH's history, organization, capital structure and market environment, we analyze the motivate and model of family oriented corporate governance.The third part of the paper begins with a summary of successful experience of growth of FH company during its start-up period. By analyzing the operation from 1996 to 1998, the paper indicates the following reasons contributing to the rapid development of FH company: 1 .building up the cohesion of corporation; 2.enhancing the stability of corporation;3.quickening the speed of decision-making .The fourth part of this paper finds out the problems in market and R&D departments in FH company which result in its current difficult situation. The paper highlights that the poor ability of attracting social capitals and brains is the main abuse of the family-oriented corporate governance.In the last part , the paper gives some advice on the organization of the committee of shareholders ,the board, the supervisory commission and how to inspire and restrain the managers.