On Legal Issues Of Creditors’ Participation In Corporate Governance

The first part expounds not only the bring-up and connotation of corporate governance butalso the concept of the creditors of the company to explicit the related connotation of the creditorsof the company involved in corporate governance. And it also makes clearly that what discussed inthis paper is the related issues about the participation of bond creditors and bank creditors on behalfof creditors in corporate governance. Then it gives an analysis of the legitimacy and feasibility oftheir participation in corporate governance based on stakeholder theory and agency costs.The second part is to introduce the models of creditors’ participation in corporate governancein Two legal systems——common law system adopts the indirect, passive participation mode，while civil law system, direct and active one. Then the author takes an analysis of the advantagesand disadvantages of the two modes when combining the relevant backgrounds in these countries.And it comes to conclusion that the two modes have their own advantages and disadvantages andtake on a trend of integration.The third part has a research on the status of creditors’ participation in corporate governancein different types of companies to stick out that they share the prevalent serious internal controlproblems. Then the author analyzes the plight of creditors’ participation in Chinese corporategovernance from three perspectives, such as our country’s economic and social environment, thelack of effectiveness when the creditors like banks are involved in corporate governance and thephenomena of serious internal control.The part IV is to design the specific system for our creditors’ participation in corporategovernance. First of all, based on the analysis of the two modes the author holds that creditors’participation in corporate governance in China should not totally apply the modes of the othercountries, but inherit the practices of the civil law countries while designed according to the actualsituation to meet China’s national conditions.Second, the creditors’ participation in corporategovernance should follow three principles, namely, banks as the core subjects in creditors when involved in corporate governance, creditors just as creditors in collective participation, andcreditors’ collectively participation in corporate governance. Finally, the article points out that threesystem should be established or improved when the creditors participates in corporate governancein China——establishment of creditors’ participation in the board of supervisors system,establishment of creditor derivative litigation system and the improvement of the creditors’ meetingsystem.