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The Insider-control Problem In The State-owned Listed Companies: Emerging Reasons And Countermeasures--From The Perspective Of Corporate-governing Mechanism

Posted on:2004-07-20Degree:MasterType:Thesis
Country:ChinaCandidate:J C HuFull Text:PDF
GTID:2156360095956404Subject:Marxist theory and ideological and political education
Abstract/Summary:PDF Full Text Request
The insider-control problem is the most serious problem in the state-controlled listed companies in China.The insider-control problem is different from insider control. Insider control means the professional manager has the right to run the company. It is also be called "manager control "in American and Britain. Manager (insider) control is the result of the evolution of enterprise institution, and it is the result of the deepening of social division of labor and the appearance of human capital. But with the managing right shifting to the manager, the following possibility increases: the manager may use his rights and information advantage to take immoral measures to erode the interest of the shareholders. This is the insider-control problem. To prevent the manager's moral hazard, a set of corporate governing system has been developed by American and Britain companies. By adopting the inside and outside governing mechanism, and by using inspiration and restriction, managers have to run the company according to the principle of maximizing the value of the company.In China, managers had also got the rights to control and run the companies in the course of reforming. In this course, a special kind of insider-control has emerged, which is the unique model of insider control in the transitional countries. This kind of insider control made it possible to make full use of the manager's special human capital and achieve great achievement in the reform work of the state-owned companies. But because of the absence of inside and outside corporate governing mechanism, China's insider control often result in the insider-control problem. The evidence of it is that managers in the state-controlled listed companies usually take all kinds of immoral actions to erode the interest of the state owner and the other shareholders. The absence of inside and outside corporate governing mechanism is the reason of the problem of insider control, but the root of which is the unique stock-holding structure of the state-control listed companies: the state is the solo absolute controlling shareholder in the listed companies. And the absence of state owner is the fundamental reason of the failure of inside and outside corporate governing mechanism. In order to protect the shareholders' interest (including the state owner and the public shareholders), it is necessary to perfect the institution of the independent trustees, to reduce the holding of the state-owned stocks and to strengthen the corporate-governing mechanism.This thesis analyses the evidence of the insider-control problem in the state controlled companies. By using the contract theory and information economics, the forming reason of the insider control has been analyzed, and finally some countermeasures had been be proposed by the author.
Keywords/Search Tags:Corporate Governance, Insider Control, Insider-control Problem, Independent Trustee, Reduction of the holding of the State-owned Stocks
PDF Full Text Request
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