Study On The Relationship Between A Listed Company’s Governance Structure And The Core Competitiveness

As economic exchanges and cooperation between countries have been deepening since the beginning of21st century, economic globalization has become the consensus around the world; all companies are now faced with the reality of fierce market competition, thus to enhance their core competitiveness is the only effective weapon for winning competition in the market. As the system base of enterprises’efficient operation, corporate governance system has a complete set of governance mechanisms, and can be used for reasonably arranging rights, distributing benefits and addressing principal-agent issues, in order to improve performance of enterprises, maximize their benefits and ultimately enhance the competitiveness. Although there is close relationship between them, the two aspects are studied separately in previous literatures, both normative researches and empirical researches on corporate governance and the core competitiveness of enterprises are lacked. Therefore, how to constantly improve corporate governance structure, and improve competitiveness of Chinese listed companies at home and abroad by addressing principal-agent issues are of great practical significance.This paper studies the relationship between governance structure and core competitiveness of listed companies from the point view of internal governance structure of listed companies in China, in order to enhance their core competitiveness by improving governance structure. Both normative and empirical research methods are used in this paper; in the normative part, core competitiveness of listed companies, including its meaning, status, characteristics and function is firstly analyzed, and then, the meaning of corporate governance, drawbacks of Chinese corporate governance, and the relationship between core competitiveness of enterprises and corporate governance structure are also analyzed, while the relationship between ownership structure, characteristics of the board of directors and supervisors and the core competitiveness is emphasized.In the empirical part, the relationship between core competitiveness and corporate governance structure elements is studied. This paper selects60listed companies in Shanghai and Shenzhen stock markets randomly in2011, and makes comprehensive evaluation for them according to the Chinese Enterprise Competitiveness Evaluation System by Jin Bei, then, the total samples are divided into empirical samples with stronger core competitiveness and control samples with weaker core competitiveness, in which30listed companies are included separately. Logistic model is constructed with stronger core competitiveness as dependent variable, and ownership structure, characteristics of the board of directors and supervisors as independent variables.Empirical studies show that core competitiveness of listed companies is relevant with their ownership structure, the characteristics of the board of directors and supervisors. The proportion of the outstanding shares, the ownership concentration, the proportion of independent directors, as well as the meetings frequency by the board of supervisors of listed companies with weaker core competitiveness are significantly lower than those with stronger core competitiveness; within reasonable limit of the largest shareholding ratio, the higher the proportion, the weaker the core competitiveness is. Under circumstances that both scales of the board of directors and supervisors are reasonable, the greater the scale, the weaker of the core competitiveness may be. And, the proportion of inside directors of listed companies with stronger core competitiveness is lower those with weaker competitiveness. The scale of the board of supervisors needs to be reasonably determined, so that they can further play the supervisory role.Finally, on the basis of the conclusions in empirical analysis, this paper gives a method for strengthening and improving internal corporate governance mechanisms, such as, deepening the reform of the ownership structure, giving full play to the resources allocation function of capital market, actively attracting and fostering strategic investors to participate in corporate governance, improving balances mechanisms among the board of directors and enhancing their independence, increasing the proportion of independent directors, strengthening the oversight function of the board of supervisors, and so on.