A Research On China's Corporate Governance Structure Of The Family-owned Businesses Based On The Life-cycle Perspective

Since reform and opening up, China's family-owned businesses have got unprecedented development in a short span of 20 years. Especially in recent years, the development of the family-owned businesses is developing more rapidly so that they ,as bright spots, have become an important component of China's socialist market economy. However, according to statistics, China's average life-expectancy of the family-owned businesses is only 2-3 years, accounting for 10% of the foreign family-owned businesses. Such "Short-life" phenomenon is worth to thinking deeply. Currently academics agree that the corporate governance structure is the core of the modern enterprise system and the necessary condition to enhance competitiveness and improve performance of the family-owned businesses. Therefore, in order to ensure that the national economy is able to develop healthily, stably and constantly, we must attach importance to corporate governance structure of the family-owned businesses.In this paper, I put the family-owned businesses into the dynamic development of life to study according to the life-cycle theory. Firstly, I from the general angle define the different characteristics of governance structure in the family-owned businesses in the initial stage, growing stage and mature stage and then point the optimal governance structure in different stages, that is, initial stage—a model of a high-degree unity of ownership and management; growing and mature stage—a "compromise governance" model of relative isolation of ownership and management.Combining the optimal governance structure and China's status of corporate governance structure of the family-owned businesses, I will point the problems existing in initial stage, growing stage and mature stage respectively from three aspects of the ownership structure and capital structure, organizational structure and operational mechanism, personnel selection and incentive and restraint mechanisms. Then on this basis, and at the same time learning from the successful experience of corporate governance of the family-owned businesses at home and abroad, I'll propose some workable measures to solute these problems, that is initial stage—to make clarity of ownership, rationalize the relationship between family and business as well as cultural system construction; growing stage—to disperse shareholding appropriately, introduce non-family members boldly and establish scientific decision-making and strategic mechanisms; mature stage—to optimize ownership structure, improve and standardize the operation of board and the board of supervisors, improve the incentive and restraint mechanisms as well as the transmission mechanism. But there isn't a common government structure suitable for all family-owned businesses. So the family-owned businesses should build up their unique governance structure according to their own development status, and make adjustment strategic focus appropriately. I believe the family-tree will keep green forever.