Study Of Impact Of The Non-Tradable Share Reform To Controlling Rights Configuration Of Listed Companies' Controlling Shareholder

Corporate controlling rights theory is an important part of corporate governance. Listed companies'controlling rights are generally mastered by shareholders,board and managers. The control relationships among them establish the total frame of inner controlling rights configuration. This paper conducts a meaningful exploration for organic entity of controlling rights configuration of the controlling shareholder. This paper supplies experience evidence for China's controlling rights research. In this study major corporate governance issues and the defects of institutional arrangements can be found in China's listed companies. On the one hand, it can provide reference for government decision-making and system design. On the other hand,it can provide theoretical support and practical guidance for improvement of corporate performance and operational efficiency through optimizing internal controlling rights configuration.Firstly,this paper analyses the definition of controlling rights and the frame of controlling rights configuration among shareholders,board and managers. Secondly, this paper analyses impact of the non-tradable share reform to shareholders,board and managers. Then this paper uses the actual data from China's listed companies to study impact of the reform to the controlling rights configuration of the controlling shareholder empirically.Through research, this paper concluds that controlling rights of listed companies basically lies in the hands of the controlling shareholder and other shareholders own relatively weak controlling capacity. the non-tradable share reform makes the share structure better. After reform, equity ratio (Top1) of controlling shareholder declines and the downward trend is significant. Herfindahl₁0 index has decreased significantly and it indicates the gap of the equity ratio among the top 10 shareholders has narrowed. The falling Z index shows that the controlling right between the controlling shareholder and the second largest shareholder has been close. The control of the controlling shareholder decreases significantly. The"due to the dominance"situation of the state-owned controlling shareholder in China has not changed, but it has eased. In short, the reform disperses the controlling rights. The share structure changes from excessive concentration to appropriate concentration and becomes more reasonable, which is a major purpose of reform. After reform, the controlling rights configuration of the controlling shareholder in the board-level has been strengthened, but the configuration in the manager-level has been reduced. The reform has impacted the controlling rights configuration of the controlling shareholder significantly.Finally, this paper presents a few policy recommendations and indicates further research direction. The policy recommendations are as follows:reducing the concentration degree of state-owned shares; equity should be appropriate to focus; improving the independence of the board and enhancing the function of the board; improving selection mechanism of the management level; encouraging institutional investors to participate in the governance of listed companies actively; strengthening the role of stakeholders in the controlling rights configuration; strengthening construction of the market environment which optimizes the share structure. Continuous optimization of the controlling rights configuration of controlling shareholder is an eternal topic. Further studies can be combined with the financial crisis. According to different industries,further research will analyse impact of reform.