Corporate Restructuring In The Corporate Governance And Capital Structure

Chinese reform on State-Owned Enterprises (SOEs) is an incremental and constantly exploring process. With deepening of reform, it is up to agenda to establish the modern enterprise institution tallying with the socialist market economic system, reconstruction of corporation system in SOEs have become the best choice of reform at last. Corporation system reform in SOEs is faced up with two problems. One is how to configure the effective corporate governance. The other is how to optimize SOEs' capital structure. We must actively explore the new realized form of State-Owned economy through developing the multiple investment entities and constructing effective exit mechanism for SOEs. Only by this way can we make the capital strength that act as shareholders take place the State-Owned capital and build corporate governance on the base of definite and liquid arrangements of property rights. SOEs' capital structure was charactered by high debt ratio. The over high debt-asset ratio not only lead to heavy interest burden on firm and obstacle of refinancing so as to enterprises lose abilities of development but also make corporate governance out of work .so how to optimize SOEs' capital structure is another task of reconstruction of corporation system.This paper is grouped into three chapters besides preface and conclusion. In preface we point out the two tasks faced up by corporation system reform. Chapter one is mainly concerned with the relations between reconstruction of corporation system and corporate governance. The reconstruction of corporation system of SOEs is to establish modern enterprise institution. The characteristic of modern enterprise institution entails corporate governance. Corporate governance as an arrangement of institution is to solve the match of the duty, power and interest so that corporation can make right decisions. In chapter 2, we put emphasis on the failure of SOEs' corporate governance after it have completed reconstruction ofcorporation system on the base of analyzing of traditional SOEs' administrative governance mechanism and give theoretical analysis from the perspective of property rights and imperfections of current laws. We provide some advice for improving corporate governance at last. Chapter 3 is analyses of capital structure and corporate governance. We indicate that capital structure influence the financing cost and corporate value , most of all it influence corporate governance .The high debt operation mechanism of SOEs cause the failure of corporate governance .in the end of the chapter some advice of optimizing SOEs' capital structure are given...