Company Operators Legally Binding Mechanism

Along with the gradual separation of ownership and managing right, agency has become a necessary trend; and at the same time, the comedown of the centralism of the shareholder's annual general meeting, the spring-up of board of directors, interior commanding and manager's damage to owner's benefit have come into being. Power without restriction cannot but make for corruption. The essence of corporate governance is derived from owner's restriction on manager out of the owner's personal care for its own benefit. The utilitarism is the groundwork. The restriction on manager must be conducted with reasonable governant mechanism. In our county's interior corporate governance, the shareholder's annual general meeting must pay attention to the right of vote, the board of directors must introduce into independent director system and evaluation mechanism, the dissection of board chairman and manager dissection. The supervisory board should abolish malpractice, enhance supervising. With regard to exterior corporate governance, we should emphasize manager's duty of notice and loyalty, exert the function of banks and institution investors, perfect shareholder's litigation, standardize capital market, and cultivate manager's market.