Ownership Structure And Internal Control Problems

Recently, corporate governance is becoming a hot academic issue in the world. It has changed a lot in different countries with aggresses globally. The background and perspective of corporate governance be affected by the basic factor of firm—equity.Narrowly speaking, corporate governance structure is the board's functions, structure, and the shareholders of the power system arrangement of the company. Broadly speaking, means the company control and distribution package of legal, cultural and institutional arrangements. The common equity structure plays a fundamental role in terms of corporate governance and therefore is an important factor determining the whole institutional arrangement of corporate governance, its installing conditions is reasonable has a decisiveness effect for the efficiency of the corporate governance. In China, most of the listed companies stem from restructured state-owned enterprises, Owing somewhat to the special historical problem, the Chinese listed companies form misshapen ownership structure, which has lead to "insider control" problems, and has influence on the corp. performance.So, what on earth is the relationship between equity structure of a listed company and its "insider control" problems, and how to influence on the corp. performance? This thesis use empirical analysis to answer this question. In this thesis, some of the listed companies in Shanghai and Shenzhen in year 2004 being used as sample, relevant counter researches on equity structure and "insider control" problems and a company's performance are done, the relations between them are examined, and proposals on improving equity structure are explored. The data of annual report that the listed companies announced are the main source of data that this text carries on the empirical research.On the guide of this thinking, this paper is composed of five parts. There are:(1) Introductions;The first part of the selection of subjects on the background, purpose and significance of the study, followed by the text content of the study, research ideas and methods.(2) Reviews on the foreign learners and the domestic learners' study results about the common equity structure and "insider control" problems and theoretical analysis on this question. The first part dealt with the meaning and equity structure appropriately. From the concentration and the different nature of the equity shares of the distribution--these two different perspectives shareholding structure analysis of the impact of corporate governance structures, company performance and the impactof the role of mechanisms. Analyze the relationships between the risk of cost, the cost of governance and the ownership concentration. Then reviewed different scholars defined the concept of corporate governance (1) the corporate governance arrangements as a system, (2) corporate governance as a mechanism for decision-making, (3) the company management as an organizational structure. Finally, analyze the equity structure and the "insider control" issues and the status of research synthesis.(3) The international compare of equity structure and corporate governance models. First major areas discussed international equity structure of listed companies and corporate governance model, mainly market-oriented of United States, the network-oriented Japan and Germany, and insider control models. Then discussed the structure of the listed companies in China's actual data, analyze the structural characteristics of the shares of listed companies and corporate governance status quo. My shareholding structure of listed companies exist complex structure, the proportion of non-negotiable shares excessive, phenomenon of "one dominating stock", institutional investors less problems. Corporate governance structures exist equity unreasonable, the State unit effectively holding the main absent from their duties, the internal control problem, and the external market is not perfect and other issues. Finally, through comparison and draw on that for my company's structure and governance model for improving the conclusions and inspiration. That we should control the main co-development and continuous improvement of the market mechanism, to strengthen insider controls for the main corporate governance models suited to China's national conditions.(4) Describe the "insider control" problems in our country. First, introduced the "insider control" issues origins of the concept and the concept's extension and development according to the conditions of our country. "Insider control" covers two situations that, the fact insider control and the law insider control. The concentration on the basis of equity and the equity of these two categories rose, with different scope, insider control is divided into four categories. Our insider control as a result of high concentration state-owned shares in the transition period And then focus on our special ownership structure of listed companies on the "insider control" issues impact analyzed. This article asserts that my special interest in the corporate governance structure and inadequate economic transition mechanism is the major cause of internal control.(5) Empirical research on the relationship between equity structure and "insider control" and firms' performance. The first study of ideas, research hypothesis, sample selection, the choice variables and parameters made the necessary data sources said that the combination of positive test results and then a variable relationship between the relevant analysis.Finally, the adoption of the corporate governance performance, the equity structure and insider control issues empirical analysis of the relationship, this draw conclusions and recommendations. The main conclusions are: (1) The performance of the company's largest shareholder with a significant proportion of the total equity is relevant. (2) Insider control and corporate shares for the existence of significant negative correlation between the ratios. (3) The first major shareholders for corporate shares, the highest degree of insider control, corporate governance best performance. (4) Unit for the state's largest shareholder, the high degree of insider control, but the company has the lowest performance. (5) When the largest shareholder of state-owned legal person shares, the lowest degree of insider control, and better company performance. And conclusions based on recommendations: (1) sub-owned shares as soon as possible, clear equity category. (2) Reduce the proportion of state shares and will settle Unit phenomenon of one stock dominance. (3) Increase the proportion of corporate shares and state-owned legal person shares, controlled insider control. (4) Nurture qualified institutional investors in corporate governance.