On The Legal Status Of Professional Manager In Public Company

Due to the huge scale of public companies, its operating conditions affect every aspect of society. Along with the development of world economic globalization, the operating conditions of multinational company would affect the whole world economic situation, such as the world economic crisis in 2008.So it is of great significance both in academic and practical aspect for one country or the world to research on the legal status of professional manager in public companies. This paper put forward some methods worthy of reference to consummating relevant legal system in China by finding out the manifestation and the source of the problem of the legal status of professional manager in public companies of china and by learning from the agency theory and advantages of foreign company governance. One valuable point of this paper is that it asserting that the law should embody humanistic concern instead of a simple, nihilism, ideal and logos design. And it make a further assert that establish humanity and practical legal system, including both insiders and external.The first part discussed the precondition issue about the research on the legal status of professional manager in public companies. First it introduced the concept of professional managers. And then it chose two cases to point out those different problems between the professional managers in state-owned public companies and the private-owned public companies. Finally it analyzed the legal suitable straits which the professional manager would face in corporate governance.The second part mainly focused on the agency theory to find out revelation to study the legal status of professional manager in public companies. This paper discussed the moral hazard and adverse selection problem in agency relation and sum up that the agency theory mainly concerns how to reduce the agency cost. Also it described the agency relation of the professional managers. It can be described like this:the professional managers represent the interests of the company by representing the will of the board of directors. This paper asserted that setting the legal status of professional manager in public companies should through the way of reducing the agency cost which was emerged by the adverse selection problem. The qualification for professional managers should be prior restricted by the law to reduce the agency cost caused by the adverse selection problem. Afterwards relief should be given to reduce the agency cost caused by the moral hazard also for the malicious violations that caused by the professional managers.Finally this part discussed that the bargaining game between professional managers and board, then made a conclusion that fire the professional managers needing the agreement of board of visitors.The third part analyzed the development condition of china's professional manager market.