Research On Governance Structure Of The Foundation In China

At this stage, generation and subsisting of Foundation mainly rely on communitydonations. Social credibility is a crucial impact on the development of the Foundation.Social credibility mainly related to two aspects: The first is government regulation,and the second is the design of the Foundation’s own system. About governmentregulation, if it is too strict will reduce the operating efficiency of the Foundation, andeven endanger the independence of the Foundation, Foundation internal staff moralhazard can not be effectively controlled if it is too lose, and therefore the mosteffective way than to set a sound governance structure. Foundation has manysimilarities with commercial companies in the governance structure, the best way ofimprove it is compare the two.The first part of this paper is the Foundation governance structure of the overallanalysis through compare with commercial companies. The similarity of Foundationand Commercial companies in the board of directors, the supervisory authority andconstitution provide the possibility that we can improve the governance structure ofthe Foundation. Meanwhile, China’s academic circles designated the Foundation asFoundation. There is a huge difference between Foundation and Commercialcompanies in the governance structure. Lack of mechanism associated with theeconomic interests. Mainly reflected in the following: on the one hand。There is notgeneral meeting of members in Foundation. The basic structure of the commercialcompanies looks the shareholders as the meaning of the formation of organs, board ofdirectors as business executive bodies, board of supervisors as internal oversightbodies. It is similar to the governance structure of the separation of powers in Westerncountries. Even in the absence of the Board of Supervisors Common Law, it isdivided this three kinds of power by provision of the independent director system."The lack of owner" or “Option missing” breaks the structures. The Foundation cannot be through the separation of ownership and control mode, to protect the normaloperation of their own by the tension between shareholders and management, which is the root of problem lies in Foundation. On the other hand, Foundation, a non-profitline and public welfare, decide it does not require calculations similar to acommercial company profits and cost, but also due to its provision of products andservices is cheap or even unpaid. Accepters is rarely feedback, it also causeddifficulties related to the main information collected. These are the lack of a clear setof performance indicators like commercial companies as the Foundation in theprocess of running.The second part of this article in basis of the analysis in the first part of thetheoretical, discourse Foundation governance structure defects, first as the Articles ofAssociation of the Foundation for the right to self-government epitomized problemsin effectiveness. Therefore not necessary to carry out this requirement, while the lackof provisions for senior management. Charter amendment will modify the rightsconferred on the Council of its powers. It is more difficult to constraints the power,Provides for the same cumbersome procedure is not conducive to efficiency.mostfoundations copy the model text of the constitution and make it invalid. The second isthat it is difficult for stakeholders to enter the Foundation. Donors can only beexternal oversight and the lack of the necessary means, recipient and vulnerable lackof its uncertainty. It is unrealistic for representatives enter into the Foundation. Thethird is that negative impact of the pay system, due to the strict limits of the country,lower salaries will deal a blow to the enthusiasm for the work of the directors andsupervisors; The fourth is that independent terms of system generated, the chairmanexercise the foreign representation independent will make it lacks the necessaryoversight and checks and balances.The fifth is the right configuration unreasonable, and only requires thatsupervisors supervise the provisions of safeguards, It is lack of clear arrangements forthe powers of the Council, duty of care for directors, The provisions of the duty ofloyalty to the other extreme.The third section describes the relationship between foreign foundations andcommercial companies, especially the difference between the two, to learn fromexperience, to provide useful lessons for the design of the China Foundationgovernance structure. Taking into account the advancing of legal migration, the authors selected four foundations that the Companies Law rules are more maturecountries in the United States, the United Kingdom, Germany and Japan, and whilethese countries belong to the common law and civil law, to ensure the mechanismcomprehensiveness.In the fourth part, the combination of theory and practice, China’s nationalconditions and extraterritorial experience，the author put forward a few suggestionsfor improvement for the questions of our Foundation governance structure. In the ofcharter amendment, Council reserved the right to amend charter amendment, but itshould be limit the power, and the business unit and administration authority setdifferent path according to Foundation Constitution in matters of importance inmonitoring. A clear division of functions and powers of both the Foundationsupervision, Raise people’s awareness of the Articles of Association in the operationalaspects of the system design and judicial practice, prompting the development perfectconstitution, and strictly enforced. We can make a certain proportion of directors andsupervisors that returned by stakeholders in implementing regulations for the problemthat it is difficult to enter the Foundation for the stakeholders. Phenomenon for lowerwages, it should be take measures of reputation incentives, specifically quantify toachieve cost savings and improve the dual purpose of active managers. Systemdefects of the terms of the independent, it should be conferred external representationon the Council, to balance the Foundation autonomy and trade order.Irrationalallocation of the case against the directors and supervisors of power, it should beprotect the right of supervision by the supervisor of the specific measures, clearauthority and responsibility of decision makers, clearly defined governing the duty ofcare, provisions more flexible fiduciary duty.