Discuss On China's State-owned Improve Corporate Governance Mechanism

Corporate governance including the two basic concepts of corporate governance structure and corporate governance mechanism. Corporate governance structure, including shareholding structure, capital structure and governance institutions, and other settings. Corporate governance mechanisms, including the operation of capital markets, employment mechanism, supervision, and incentive mechanism.Through the domestic and foreign enterprises corporate governance mechanism of the study, I believe that corporate governance mechanisms can be broadly grouped into the following three conditions:A situation, major shareholders from the direct management of the company. Ownership and management of such companies is not separated from the actual control of major shareholders and officers assigned direct management.The situation, the parties jointly managed by the shareholders or by a party-based management company. Is mainly limited liability company. Companies are generally smaller, less number of shareholders, most of the 23 shareholders. The Board is the actual shareholders, coupled with general manager of a management structure. The management side was represented by the shareholders composition.Three cases, by executives of the independent management of the company, or the right to ownership and operation of appropriate separation of the company. Taking these circumstances I believe that the mechanism of corporate governance is that the investors who use of legal and corporate charter or other forms to protect the rights of investors. The generic term for this category of corporate governance is the company control and mechanism what is used to reducing the cost of agent, by dints of the medium what is spontaneous competition in the market or designed system. According to the designed mechanism or the source of using resources, the mechanism of corporate governance is divided into internal and external control systems.China's state-owned enterprise reform is the direction of corporate system, establish a modern enterprise system. State-owned enterprises to speed up the pace of corporate reform, corporate management structure to gradually establish and improve, the operational mechanisms of enterprises to further conversion. However, the restructuring has been the operation of state-owned companies, corporate governance issues still outstanding, state-owned corporate governance system deficiencies still exist. State-owned corporate governance mechanism of the major problems in the following three aspects:1, the state-owned corporate governance mechanism "Out of control". After the reform, mostly state-owned company established a board of directors, board of supervisors and managers, some of the establishment of a shareholders. Theory is to achieve a basic clearly defined powers and responsibilities, but the lack of standardized operation, the internal supervision mechanism of checks and balances did not really play a role.2, the management incentive and restraint mechanisms "No way". Establish and improve the company's management incentive and restraint mechanisms is the separation of ownership and management of the inevitable requirement. As the history of state-owned enterprises big pot of inertia, the management of state-owned companies lack the incentive. However, the current situation, the state-owned company's management problems in lack of incentives are still very prominent. And inspire a single way, is short-term incentive-based approach, medium and long-term incentive means less incentive mechanism can be no real effect.3, the company disclosed information "Not true". State-owned companies prevailing "internal" control problems, the company business objective is actually to maximize the interests of management and investor interests or the interests of workers and the target was, in fact, on the back seat. By profit-driven, state-owned companies to disclose information "Not true." Company information is especially important business decision-making information, financial information is controlled and manipulated by management, investors and ordinary workers and stakeholders to get the real information, the information asymmetry.Summed up China's state-owned corporate governance mechanism in the existing problems, mainly due to major shareholders control the company and the traditional non-market economy thinking of the impact of the company's management not only to pursue the maximization of corporate profits, companies seeking to maximize its contribution, which is bound to Ignored or even violations of other shareholders in particular, the interests of small shareholders. Major shareholders and medium-sized and small shareholders must exist between the contradictions and conflicts. China's state-owned corporate governance mechanisms are not suited modern management requirements, lack of good corporate governance mechanism of the soil. And state-owned investment company in the interests of the governance mechanisms are not protected, state-owned companies still lack the ranks of high-quality managers and incentive and restraint mechanisms, showing a lack of mechanisms for the protection of rights and interests of small shareholders, the three will be the effective implementation of the supervision mechanism, the owner missing - Internal control is widespread, and so on.China's state-owned enterprises under the existing problems, I believe that in the following three areas should be improved:1, the establishment of an effective incentive mechanism to achieve competitive principles. Incentive mechanism is to solve the modern company "the right to separate the two" problems caused by the agent and the phenomenon of internal control, and corporate governance arrangements for the most important part. China's companies to establish an incentive mechanism, to break the one hand, the appointment system, the establishment of the market manager. On the other hand, to a reasonable balance of the remaining managers control and Residual Claim, exploring ways in which operators pay and company performance combination of incentive mechanism.2, limit the power of controlling shareholders. As a major sponsor of the state-owned enterprises, a majority of non-listed shares, which the controlling shareholders in listed companies have enormous power. Board of Trustees, members of the board of supervisors appointed general manager of the appointment and removal, the company's development and to amend the Constitution, and other major business decisions by controlling shareholders operate. To this end, it is necessary for controlling shareholders to limit the power. 3, and strengthen information disclosure system, enhance the transparency principle. Good governance disclosure requirements of the real accurate and reliable. High-quality information disclosure to protect investors in the capital market's confidence, saving the cost of investors to collect information, help investors the right decision.Through the three existing foreign corporate governance mechanism for the theoretical study, I believe that imitate or copy the Western system of governance of state-owned enterprises, not conducive to the economic transformation period, the rational choice and the right of state-owned enterprises in China Construction of the governance mechanisms. The state-owned enterprises, the appropriate corporate governance mechanisms should be self-regulatory function, according to the outside world and its own advantages and disadvantages of the changes constantly judge and make corresponding adjustments. Therefore, establish effective corporate governance mechanism, from the market, owners and enterprises, and other dimensions to consider. The establishment of China's state-owned enterprise management mechanisms, must be based on China's state-owned enterprises in which their own characteristics and the socio-economic and cultural systems. In other words, is the need to ensure that state-owned assets in maintaining and increasing the value and prevent the loss of state assets be among the best balance.First, the state-owned enterprises in separating government from enterprises must create a contingent of entrepreneurs at the same time, strengthen the operators of the incentive and restraint. The core is to encourage operators to maximize the effectiveness of the pursuit of personal transformation for enterprises seeking to maximize profits. Board of Directors through the identification of a plan to achieve optimal return on the operator's incentives. This compensation plan should reflect the best long-term incentive and short-term incentives, the combination of material incentives and encourage the spirit of the combination, formed mainly by material incentives, incentives, supplemented by the spirit of the incentive mechanism.Second, continue to vigorously implement the reduction of state-owned shares, preference shares to ordinary shares from. Yigududa state-owned shares of state-owned corporate governance is an important reason for invalid, and reduce the proportion of state-owned shares, the shareholding structure reform is an important way. An effective model of state-owned share reduction, should ensure that the minimal loss of state assets, protect the owner of state assets Residual Claim of ownership and control.Third, the establishment of three-tier structure of the state-owned assets management system. State-owned assets management system in the new framework, in addition to a small number of large state-owned enterprises, two-level "SAC - state-owned enterprises," the state-owned assets management system, other state-owned enterprises in state-owned assets management system implementation of the three-tier system, namely, "SAC -state-owned holding companies - state-owned enterprises."Fourth, actively cultivate a contingent of state-owned enterprise managers. Managers of state-owned holding company of state-owned holding company responsible for the day-to-day operations, through appropriate mechanisms to monitor and encourage the state-owned holding company is to guarantee the efficient operation of the foundation. China's state-owned holding company with majority state-owned enterprises facing the same problem, that is, the managers of the lack of incentive. While some state-owned enterprises introduced the annual salary system and Stock Ownership Plan, stock options and the pilot, but the managers of income is not commensurate with their duties.In short, China's state-owned enterprises need to establish modern corporate governance mechanism that is bound by state-owned companies improve the supervision mechanism, to build a multi-pronged monitoring and control of state-owned company responsible for the three-dimensional line of defense. Should clearly state the company responsible for the duty, and truly establish a market economic system and restraint mechanisms to achieve power and responsibility, and so on; strengthen social supervision, increase the transparency of the operation of state-owned assets and then establish a set of Chinese characteristics, China's state-owned enterprises in line with the actual corporate governance mechanism, to help China's state-owned enterprises take a benign rapid development.