An Investigation Into The Corporate Governance And Financial Management Pattern During The College Industry Reform In China

Having existed for a few decades, China's college industry has developed into a considerably large scale and made significant contribution to both higher education and the society. However, with the deepening of the country's economic system reform, some issues that can not be neglected have appeared increasingly obvious during the development of China's college industry. Based on its current situation, this paper discusses five correlative topics. Topic 1: Is it reasonable for colleges or universities to run enterprises directly? Topic 2: What kind of enterprises should colleges run? Topic 3: What will their business mode be after the restructuring of college-run enterprises? Topic 4: What will the corresponding corporate governance pattern be after the reform? Topic 5: What will the financial management pattern that keeps pace with the reform be?Both"Functional Extension Theory"and"Theory of Integration of Production, Teaching and Research"provide grounds for the existence of college industry. Besides, the present state of Chinese colleges and universities indicates the inevitability of the reform in this industry. According to the current situation of the reform,"Jiangzhong Mode"and"Firewall Mode"are two major reforming modes. Since"Firewall Mode"is comparatively not only of great operability and worth learning but also conforms to the college industry reform policy guidance by the Ministry of Education, it is surely to become model of the college industry reform.The corporate governance pattern of an asset management company which is central to the"Firewall Mode"framework is extremely important. Moreover, the board of directors considered to be the core of modern corporate governance links shareholders and stakeholders with the management. The constitution of the board has its own particular characteristics and its improvement assumes great significance. As the parent company of various enterprises in the whole college industry group after the reform, the asset management company should select centralized financial management pattern to implement integrated overall budget pattern within the group, enhance internal audit control and improve financial index assessment system. In this way, the asset management company can not only strengthen the financial management of its subsidiaries but also encourage them to realize their common financial objective together.