Shengda Corporate Governance Mechanism

Family corporate, as a form of enterprise, is playing a very important role in social and economic society. It is estimated conservatively that family corporate accounts for 65%-80% in all enterprises. But the families corporate in China are mostly ephemeral; few ones can survive more than 10 years in the market. Reasonable governance mechanism is the basis for long-term development of corporate. That is why the research to family corporate governance is becoming more and more important.ShengDa is a family owned company established in year 2002. Though it developed very fast in recent two years, ShengDa met many problems, which is now becoming its barrier to success, Such as lack of capital and personnel, property right over centralization, Unitarianism etc.Private enterprises can transform the governance system from family-based governance into modern corporate governance by means of decentralizing property rights, setting up multi-subjects' monitoring and controlling system which is held by family, formulating institutions for management, reforming and improving the incentive and controlling mechanism to managers, perfecting the manager hiring and firing mechanism and founding a learning organization inside an enterprise, and etc.Hopefully the firm could benefit from proposal in the paper; also the proposal will be helpful for other family companies of same kind.