Research On Corporation Governance In The Post-share-right-division Era

One of the most fundamental changes of the twentieth-century corporations was the seperation of ownership from control associated with substantially diffused share ownership. This seperation, together with the weakening supervision from shareholders, leads to " Insider control" infringing the interests of shareholders. Against this background, the independent director system was introduced to supervise the abuse of managers' power.In the era of stock right division, "Insider control" in Chinese list companys was different from that in developed countries and it was listed as the Board's control dominated by major shareholders.Under the direction of CSRC, the independent director system was compulsorily introduced to Chinese list companies. But the independent directors haven't protected public shareholders' interests effectively because the division of the non-circulating stocks and circulating stocks make the major shareholders dominate absolutely the Board. Before the reform, the control shareholders are almost non-circulating stockholders.The changes of stock prices can't impact the control shareholders' interests and they won't consider but even damage the circulating stockholders'interests when they make the important decisions. In this condition,the independent directors are difficult to say no to the control shareholders.The equity division reform is the most important system reform in the Chinese capital market. It redistributes the shareholders'interests. After reform,non-circulating stocks and circulating stocks can share the same interests. Thus,the equity division reform can help to make list companys' corporation governance more perfect. This paper is about independent directors and the reform of the list companys' corporation Governance based on the whole shares circulation. The main content is made up of four charters.CHARTER I is about the course of foreign list companys' corporation governance and the references for Chinese list companys. The main content is the development course of foreign list companys' corporation governance and the analysation based on the comparation of the England and America model" with"the German and Japan model".CHARTER II is about the outcome of the indpendent director system and the influence that is imposed on Chinese capital market. This charter tells the history of the indpendent director system in developed countries and different opinions about it. It also tells the history and the influence of the indpendent director system introduced to Chinese list companys.CHARTER III is about the equity division reform and Chinese list companys' corporation governance. On the base of the charter I and charter II, this charter analyses the Chinese list companys' corporation governance in the era of stock right division. This charter also analyses how the whole shares circulation influence the list companys' corporation governance.CHARTER IV is about making perfect the internal and external governances of list companys in the post-share-right-division era. In this charter, I will give some pieces of advice: Firstly, we must make great efforts to develop the institution investors and substantially diffuse share ownership. It can make the trade of the list companys' control right more active and perfect the list companys' external governance. Secondly, in order to make the list companys' internal governance more efficient,we must reform the indepent directer system and make decisions of the Board more scientific and more efficient.At the same time, the directors can supervise each other in the Board. Thirdly, list companys must take up social duties. According to the duality company governance,we must diferentiate the right boundary between the Board and the watchdog committee. It is necessary to let the stakeholders take part in the list companys' corporation governance.