An Empirical Study On The CGR Of Listed Companies In China: A Stakeholders Governance Perspective

This years, the researches on corporate governance have developed a lot at home and abroad. The level of corporate governance in China's Listed Companies has shown a trend of improvement. The Stakeholders such as small and medium-sized shareholders, staffs and creditors participation in corporate governance is useful to improve the construction and level of corporate governance in China's Listed Companies. However, the corporate governance scandals burst out in China's stock market, such as Kelon, Guangxia and Zhengbaiwen, cause us suspected on the mechanism and quality of corporate governance in China's Listed Companies. The researches on CGR have aroused the attention of scholars.The research is based on normative study and empirical study, which is used in the examination of the relationship between CGR and stakeholders participation in corporate governance. In the normative study part, the research tries to define the corporate governance risk, which is defined a deviation form the goal of corporate governance. The reason which causes the deviation is the bad construction and mechanism of the corporate governance in China's Listed Companies, which lead to the increasing of principal-agent costs. The implementation of company's strategy and management can't operate normal. The value of the company reduces, and stakeholders lose a lot. The conception of CGR emphasizes the deviation form the goal of corporate governance, which provides the basis for measuring the CGR.In the empirical study part, the research proposes six hypothesizes, which are regard to the relationship between CGR and stakeholders participation in corporate governance. The dependent variable is the rate of violation amount and the company's total assets. There are six independent variables, which are the level of staff participation in governance, the level of the protection of small and medium-sized invertors, the level of the investor relations management, the implementation of social responsibility, the relationship with the department which supervise and manage company, and the company arbitration proceedings. Choose 123 Listed Companies which are punished or reprimanded public by China Securities Regulatory Commission from 2006 to 2008 as study sample. Build a theory research model, and start the empirical study which is about the relationship between CGR and stakeholders participation in corporate governance with the multivariate statistical analysis tool.The result of this research shows there are significant negative correlations between the level of CGR and the level of staff participation in governance, the level of the investor relations management, and the company arbitration proceedings, but there are not significant correlations between the level of CGR and the level of the protection of small and medium-sized invertors, the implementation of social responsibility, and the relationship with the department which supervise and manage company. Come to the conclusion, improving the level of stakeholders participation in corporate governance can reduce the CGR level, which can protect the interests of small and medium-sized invertors, staffs and creditors, and prevent the violation of company. Stakeholders taking part in corporate governance is not good enough in China's Listed Companies. So we should pay more attention to stakeholders, for that they can play a supervisory role well.