The Correlation Research Between The Financial Control Right And Company Performance

In modern companies, the right of deciding the company's financial resources or approach, which is on the basis of directly or indirectly owned shares or debentures, so in the company the right of the financial decision-making and distribution of surplus and other major financial matters is the company financial control right. It is the core and soul of the company's control right. On the basses of the relating theories, we get that a company's financial control right largely under the control of major shareholders, they control the major principles and policies on finance through shares in the shareholders meeting, thus impact the company's operating performance. At the same time, we analysis existing theories' one-sided judgment, and we come to that the majority shareholder's profit is reasonable returns of the excess costs, not the against to medium-sized shareholders. Besides we calculated the profit of the company financial control right reasonably. And in accordance with capital structure theory, the principal-agent theory, the separation of powers and financial stratification theory and so on, we study the company's operating performance through the arrangement of the financial control right in corporate governance structure. We introduce Banzhaf index to measure the financial control right of shareholders and managements, which is used to measure right in the Game Theory. Targeting at the data of listed companies between 2003-2005,we make empirical study the correlation relationship between the different arrangement of the company control right and the corporate performance, and get conclusion that the appropriate separation of financial control right and the main financial controllers are corporate shares can improve the company's performance, the times of supervisors meetings> the time that financial officer is on,the establishment of the Board can clearly improve the company's performance, and the number of board meetings, whether the financial officer is part-time are negatively correlate with the company performance. On the basis of the empirical conclusions, we propose that encouraging corporate financial controllers, through the repurchase of state-owned shares to reduce the percentage, improving their corporate governance structure together with the arrangements of the financial control right, implementing rights and benefit to the right proportion, establishing the financial mechanism of common management and camera governance.