Research On Parent-subsidiary Corporate Governance In Liaoning Equipment Group

As our country accessing to the WTO, China encounters lots of competitions from the world along with the constant development of economic globalization and the deepening of China's opening to the outside, then building large enterprise groups has increasingly become a trend. As a pillar of the national economy, the corporation governance of Enterprise groups has directly influenced the extent of our country in order to establish a modern enterprise system as the goal of the success or failure of the reform of enterprises, then to solve the issue of the corporation governance following with the complexity of the enterprise groups has become a common concern in the field of Management Academics and Business Community.The paper researches the issues of corporate governance in the condition of asymmetry information; it initially constructs the theoretical framework of the parent-subsidiary corporate governance. With the guidance of this theory, the paper mainly focuses on the following issues. Firstly, it introduces the parent-subsidiary corporate governance of the Liaoning Equipment Group (Group of equipment). Then it mainly analyses the issues existing in parent-subsidiary corporate governance, especially in mainly subsidiary. Last but not the least, the paper researches the reconstruction of the subsidiary of the parent company of governance.In this paper, research is focused on three aspects as follows:(1) A detailed study on the theory of corporate governance and the relationship between the parent and subsidiary corporate is carried out. The main content of parent-subsidiary corporate is that client (parent company) design incentive and constraint system of check and balance for the agent (subsidiary) in asymmetric information conditions, including parent-subsidiary corporate allocation of property rights, organizational structure, incentive and restraint mechanisms, the financial supervision system and manager selection system etc. The theoretical framework parent-subsidiary corporate governance is established initially.(2) First, we introduce the situation of parent-subsidiary corporate governance relationship in Liaoning Equipment Group. Then we'll use parent-subsidiary corporate governance theories to analysis the problems in this group, including the problem of the main subsidiary beyond the control, how to motivate and restrict the management of subsidiary corporate, opaque financial system etc.(3) Using related theories to seek solutions of problems about parent-subsidiary corporate governance in Liaoning Equipment Group. The following are the main aspects of reconstruction:rationalize the relationship between a parent company and a subsidiary; redesign incentive and restraint system of management in subsidiary corporate; redesign the financial supervision system in order to solve the opaque financial problem. By taking measures above, problems of asymmetric information in parent-subsidiary corporate can be solved. As a consequence, parent corporate can maximize the benefits and enjoy their rights, which can increase the value of state-owned assets.