Corporate Governance And Protection Of Investors' Interests

To vindicate shareholders' equities is the core of corporate governance, which should be more regarded for protecting the interests of small investors and creditors, when the interests are deprived by big shareholder and operator. Viewed from the historical evolution of company system, corporate governance pays more and more attention to protecting investors' interests, and the theory of interest groups also supports it. Because of the disperse stock ownership structure and developed capital market, the corporate governance pattern of stock-ownership-dominated in England and America mainly depends on such methods as discarding of stock to protect investors. But in the pattern of German and Japan, big shareholder governance and main banks system are adopted to realize the purpose due to the undeveloped capital market. As to the family administrative system in Southeast Asia, it tends to put reliance on the combination of ownership an operation right. The three patterns all have their own advantages and disadvantages, and the degree of legal protection for investors' interests should be the foremost consideration.The irrational stock ownership structure of Chinese listed corporations, which is characterized as "absolute ratio share", stock ownership separation and so on, leads to the inefficacy in stock ownership governance. So we ought to take some actions, including reducing the quantity of state owned share, making them circulate entirely and nurturing institutional investors, in order to optimize the stock ownership structure of listed corporations and make it multiplex and competitive. But it is most important to protect investors' interests by perfecting governance mechanism favorable, establishing the stock repurchase system of minority shareholders and the legal relief system of safeguarding investors' rights. At present, debt's financing in Chinese listed corporations turns out to be inefficient, such as deficiency in withdrawal and bankruptcy mechamsm, low ratio in bond financing, which should be resolved fundamentally, based on deepening the reform of state-owned commercial bank, developing bond market and enhancing the legislation in protection of creditors' interests.