The Research Of Big Share Holders', Corporate Governance And Corporate Performance

This paper discusses the effects of big share holders' nature and its holding ratio on corporate governance and corporate performance. An efficient corporate governance structure is the core of modern enterprise system, whereas equity structure, mainly affected by big share holders, is the base of governance structure. Besides, big share holders play an important role for effective corporate governance. This paper, focusing on the current situation of the listed camphorates, analyzes the relationship among big share holders, corporate governance and corporate performance. With the respective data of the financial institutions, this papers does an empirical research, which concludes that the ratio of state-owned shares against the overall shares is positively related to the corporate performance; that the ration for institutional stocks is negatively related to the corporate performance; that the ratio of tradable stocks has no effects on the corporate performance; that certain stock holding concentration contributes to the improvement of corporate performance.This paper is composed of five sections. The first section describes the foreign and domestic research achievement on the corporate governance and makes brief comments on these achievements, which is ended with this paper's research approach and its uniqueness. The second section describes the fundamental theory in corporate governance, which is initiated by the beginning of corporate governance theory. Then this paper describes the connotation of corporate governance, the theory of separation of ownership and management, trust and agent theory, the stakeholder theory and the tendency in this research.The third section analyzes the effects on the corporate governance and corporate performance by the big shareholders' nature and its holding ratio. In our perspective, big shareholders'different holding ratios impose different effects on the corporate governance. So, big shareholders'holding ratios, stock holding concentration are not the only factors that decide the effectiveness of corporate governance. Whether state shareholders and institutional shareholders influence the corporate governance is still controversial in the academic field. The public traded stocks have no prominent effects on corporate governance.In the 4th section, through empirical research and analysis, this paper finds that due to the uniqueness of the Chinese'financial industry, the ratio of state-owned stock against overall stocks is positively related to the corporate performance, the ratio of institutional-owned stock is negatively related to the corporate performance, the public-traded stocks have no prominent effects on the corporate performance, and that the diversity of equity structure is more beneficial for improving the corporate governance.The 5th section deliverers the recommendations based on the above research. Firstly, optimize the equity structures within our listed companies, continue the nontradable shares reform, diversity investors and appropriately decrease the holding of state-owned shares. Secondly, build effective incentive mechanism both for the big shareholders and managers. Thirdly, optimize the ratio for big shareholders' holding, decrease the ratio for big shareholders to a proper level and narrow the gap between the big shareholders' holing and small shareholders'. Fourthly, improve the capital market, the protection for shareholders'interests, information disclosure system and market supervision. Fifthly, regulate the rights and obligation of big shareholders. Lastly, some specific measures are suggested for the listed financial corporations.