Analysis Of Effective Functioning Conditions Of Corporate Governance

Corporate governance arrangements as an advanced and effective system of checking and balancing mechanisms, due attention has been put by scholars and people from all walks of life. In 1990s, with the accelerated development of economic globalization, national corporate governance practice has also undergoing profound changes. While corporate governance reform in various countries for different reasons, but for corporate governance concerns are reflected in a consensus: It is widely recognized that effective governance is the necessary conditions which the enterprise sustains grow and the microeconomic foundation to ensure the efficient operation of modern market system. Enterprise reform of China is a global wave of sound corporate governance component. Establishing a modern enterprise system is the direction of the reform of China's state-owned enterprises. The core content of the building of systems is the traditional state-owned enterprises corporatization reform, and the gradual establishment of an effective corporate governance structure. "The separation of ownership and management rights" is the symbol of the rise of the modern company, and the assets of the investor, not by himself but company management to manage.The basis of the study in the predecessors to corporate governance theory as the basic starting point, bold and will be constrained and influenced corporate governance factors attributed to the effective functioning of the three corporate governance conditions: effective principal-agency relations, effective incentive and restraint mechanisms for optimizing the equity structure. These will be as effective corporate governance standards used to analyze the operation of our state-owned enterprises corporate governance structures existing equity unreasonable, capital market imperfections and other issues. These issues have been the source of many economic systems is still in transition, the traditional regulatory system is not perfect and problems continue to exist. Next to closely integrate the current corporate governance issues, to external control, and strengthen internal corporate governance issues, the implementation of the rationalization of the equity , improve, and develop professional managers and capital markets with a view to achieving effective corporate governance and standardize business operations, and ensure the long-term development of enterprises.