Consumer Participation In Corporate Governance

Modern corporate governance encourages the participation of stakeholders consumers as the ultimate bearers of the commodity or service provided by company, as one of the important stakeholders in the company, should have the right to a formal or informal participation in corporate governance. Consumer participation in corporate governance is in accordance with the idea of Company Law that company should bear the social responsibility, and it is conducive to protect the rights of consumer that given by the Consumer Protection Law, and it is benefit for urging the company to keep specification management and health development. This article based on the current laws and regulations, combined with related theories and the reality of the consumer market, to demonstrate the necessity of consumers to participate in corporate governance. The article introduces the present situation of consumer participation in corporate governance in our country and the existing problems, and then gives improvement measures and suggestions with the reference to foreign relevant legislations.The first part of this paper introduces the basic concepts of consumer participation in corporate governance, integrated with previous views of scholars, and then analyzes the value. The article begins with two basic conceptions:consumer and corporate governance, with reference to the economic scholars and jurists, and then determines the meaning of the alleged respective in this article. On the basis of these two concepts is the meaning of "consumer participation in corporate governance". Then the article analyzes the value of consumer participation from two dimensions. Firstly, on the practical level, on the one hand, our country is in economic transition period, lacking of social credit, and the rights and interests of consumers do not guarantee. On the other hand, the average life of national enterprise is very short. For consumers and companies both need to explore a new path to achieve the win-win of both. Secondly, on the law level, the new Company Law in2005provisioned that companies should bear social responsibility, and the listed corporate governance guidelines clear that consumers belong to the stakeholders. The law reserved space for consumers to participate in corporate governance.The second part gives a briefdiscourse on the theories of consumer participation in corporate governance, to support the proposition of consumer’s participation. The theories involve corporate social responsibility theory, consumer sovereignty theory and stakeholder theory. Corporate social responsibility theory from the perspective of managers explains why the company should undertake social responsibility and should undertake what kinds of responsibility, and consumers are one of the subjects. Consumer sovereignty theory mainly discusses the dominant position of consumers in the modem market and explains that company only to protect the legitimate rights and interests of consumers are likely to get sustainable development. Stakeholder theory is more attention to the legitimate rights and interests of stakeholders, to explore how to participate in corporate governance to ensure the realization of the rights and interests.The third part of this paper introduces the present situation of consumer participation in corporate governance in our country and the existing problems. Our country has no clear specification on consumer participation in corporate governance. So for the analysis of status quo, we can only find out from the current situation of corporate social responsibility and stakeholder participation in corporate governance. According to the published corporate social responsibility China corporate social responsibility report and data from2007to2011has carried on the general analysis of the status quo. And according to the situation of consumer market in China and the relevant literature, to introduce the main problems existed in consumer participation. Problems mainly from two aspects, one is the conceptual obstacle, another is due to consumers’dispersion leads to ditiiculties in the actual operation.The forth part integrates the related foreign legislative cases on consumer participation in corporate governance. As the pioneer of company system, some states of the United States have more rules about consumer participation in corporate governance. The organization for economic cooperation revised the OKCD corporate governance principles in2004, in the core part of the OECD principles of corporate governance make the rules for the participation of stakeholders. In response to the recession and restore public confidence, the European commission published "the new European corporate social responsibility strategy report2011-2014" in2011. In the principles, one of the corporate social responsibilities is stakeholders sharing value maximization. The article also analyses the relevant provisions of other countries.The fifth part of the paper is mainly about how to realize the consumer participation in coiporate governance in our country. The first is the improvement of the legislation, including refines the provisions on corporate social responsibility issues and operability in Company Law, and makes specific rules in Consumer Protection Law. The second is the perfection of concrete system and supporting facilities. The concrete system analyses how to effectively participate from two aspects:company provides the convenience for consumers’participation and in consumers" view how to participate to achieve the target. The supporting measures are mainly to protect consumers’claims, through the fast afterwards relief measures to protect consumers to participate in corporate governance.Consumer participation in corporate governance is not only in response to the consumer market chaos phenomenon in China’s economic transition, but also to become a long-term path for safeguarding consumers’rights and interests and achieving the company’s sustainable development. Consumer participation in corporate governance is conducive to achieve the double-win to both consumer and corporate operators.