A Study On Government's Functions In Corporation Governance: Functioning Beyond Or With Absence Of Authority

With the globalization of the world economy, both developed and developingcountries are paying great attention to corporate governance. China's economy now istransferring from a planned economy to a market economy, which has a profoundinfluence to the future development in the country. Since corporate governance is aneffective guarantee for corporate competitiveness, it is also critical to the state-ownedenterprise reforms in China. To improve the corporate governance will not only needefforts from the enterprises, but also asks for government supports. Therefore,whether government can play an active role in leading and promoting the corporategovernance is crucial for the state.This paper has studied different theoretical schools and patterns in corporategovernance, and further discussed the government's functions in corporategovernance. As for the present situation of the government's functions in corporategovernance in China, such as acting beyond the authority or functioning with absenceof authority, the author would like to put forward some suggestions for furtherimproving the corporate governance.First, the author introduced the definition of corporate governance, relevanttheories, main schools and patterns of corporate governance, government's functionsin corporate governance. Then, the author analyzed the legal environment, marketcompetitions, state-owned shares, incentive measures, relation between"Three-New-Board"(Shareholder's meeting, Board of directors, Board of supervisors)and "Three-Old-Committee"(Party Committee, Labor's Union, Employeerepresentative's meeting), and raised some proposals solving the existing problems inthe above 5 aspects. Thirdly, the author addressed the situation of the government'sfunctioning beyond its authority in corporate governance, such as nomination ofenterprise managers, setting operation goals and making operation decisions for theenterprises, training the institutional investors, regulating banks' functions incorporate governance, of course, also tried to bring forward some resolutions for theseproblems. Finally, the author summarized all the above points and predicted a brightfuture for corporate governance in China.