Study On The Correlation Between Corporate Governance Structure And Performance Of Private Enterprises

Chinese private enterprises emerged in the early eighties of last century. After 20-year development, Chinese private enterprises have been an important part of our national economy. But under the context of Chinese transition economy and premature market economy, various problems especially concerning corporate governance have arisen during that period of time.Corporate governance is a concept which can be explained from multi-level and multi-angle. There are many theories of that, which can be summed up as follows, business cost theory, agency theory and stake holders theory. Corporate governance and corporate governance structure are two different conceptions, which also have some correlations with each other. Corporate governance structure is part of corporate governance but mostly emphasizes the governance of the internal enterprises. Enterprise performance is influenced by corporate governance, corporate governance structure and external circumstances. Such factors together decide the enterprises performance.The development of private enterprises and the evolution of their property rights have resulted in their particular problems about corporate governance. At the initial stage, it is rational for private enterprises to adopt family governance pattern. However, with the expansion of the enterprises, the malpractice of family governance has emerged gradually. Corporate governance has become the bottle-neck obstructs further development of private enterprises. Through theoretical analysis, based on the successful practice of the evolution of corporate governance structure carried out by the private enterprises in the developed countries, the thesis supports the viewpoint that it is right for Chinese private enterprises choose family governance pattern. Meanwhile, the thesis puts forward the evolution way of corporate governance structure of Chinese private enterprises and suggestions optimizing it.As a matter of fact, to a great extent, corporate governance affects the operation and performance of the enterprises. However, there are few achievements about researches into the above problem and the conclusions vary. Corporate governance structure comprises of abundant content. We have to study the correlation between corporate governance structure and Enterprises Performance from multi-angle. The thesis sets 15 index reflecting the characters of corporate governance structure from different angles and uses ROE (Return on equity) as the index of the corporate performance. On the premises of controlling two variables -scale and Assets Liabilities Ratio of the enterprise, the thesis studies the effect corporate governance structure puts on the corporate performance. Reaches based on Descriptive Statistics have found that the status quo of the private enterprises' governance structure and performance are as follows, the corporate governance structure has been formalized, and the performance has not been improved substantially. Empirical researches have showed that in varying degrees the indexes of private enterprises such as the changes of stock right, stock right concentration degree, the number of board of directors, annual salary of the directors and senior managers have positive correlations with the performance. Among all the factors, stock right concentration degree affects the performance greatly. Meanwhile, indexes such as degree of rest riction, the number of meetings held by board of directors, performance of board of supervisors and the number of the independent directors have no remarkable correlations with cooperate performance.