A Study On The Trend Of Corporate Governance Model

With the tide of economic globalization, company law, which is an importantpart of our economic system, is facing the test of competitiveness. Modifications ofcompany law are made to adapt to economic development and more and moreresearches are made on corporate governance issues. Scholars made manyassumptions on the trend of corporate governance model, and whether the governancemodel will convergence or not is still on intense discussion. Our country is on thecrucial period of rapid economic growth and transition, and company system is ofgreat importance to national economy. As an adopted law nation, we are still on thestart line compared to developed country though great improvement has been madeon company law systems. So in deep study of the modal of advanced corporategovernance and its trend is of great importance on economic growth.In recent years, many countries modified their company legislation and there is aso-called convergence trend of corporate governance model, so scholars proposeddifferent views on the trend of corporate governance model. Their representativeviewpoint includes: convergence theory, existing theory and eclectic theory. In thispaper, by using interdisciplinary approach, our own viewpoint about corporategovernance connotation was proposed from the law and economic perspective, webelieve that corporate governance has different meanings from different aspects, butone thing is for sure, corporate governance is a processes of static systemarrangement and dynamic decision making, is a combination of a series ofsupervision and incentive mechanism, and it is a unit of internal active managementand external indirect management. Based on this and institutional evolvement theory,the author studied the trend of corporate governance model. By using comparativeanalysis method, corporate governance pattern formation causes and characteristics isstudied. By using literature review method, literature about corporate governance andthe future development trend are analyzed in this paper, based on this, theoretical basis of a variety of perspectives is studied.As representatives of convergence theory of foreign scholars, Hansmann andKraakman think corporate governance model’s trend is convergence in the form. AndProf. Sun Guangyan, who is representative of convergence theory in China, alsothinks that the trend of convergence is like flood, it will overcome all difficulties, andbecome uniform in the context of globalization.As a representative of existing theory, Roe’s political influence theory is mostrepresentative viewpoints. He believes that people often think company law is aproduct of law and economy, so they trend to consider the influence of law andeconomy. Although the influence of political factors is often very subtle, politicalfactors should not be ignored just like the impact on large-scale production ofpolitical expectations. Prof. Li Minghui in China thinks that there is a trend forcorporate governance model convergence, but convergence is not absolutely, anddiversities will always exist. He believes that this kind convergence is bidirectional,not unidirectional.The representatives of eclectic theory of foreign scholars admit path-dependencytheory and institutional complementarities’ influence on corporate governance modeland this result in development of distinct models. But strong environmental selectionmechanism makes inefficient system to be eliminated; only the most efficient modelcan ultimately survived. Domestic representatives criticized the viewpoint ofconverge to the Anglo-American model. They believe there is no evidence thatownership concentration countries have evolved into ownership scattered countries.By comparing the trend of corporate governance models of different country, it canmake a conclusion that functional convergence is the best choice.The author holds the following points: firstly, corporate governance modelconvergence caused by economic globalization is just a phenomenon, not a standard.We cannot regard this phenomenon as our goal. Secondly, the basis of existing theoryincludes: countries with different political, economic and cultural environment, andinstitutional evolvement has the feature of path-dependency and institutionalcomplementarities, and rent-seeking behavior of interests group, all these basisindicate that corporate governance model will not convergence totally, and the forms of diversities will last. Finally, corporate governance model convergence phenomenonitself isn’t worth our in deep thinking, but the essence of this phenomenon, that isprocesses of company institutional evolvement, worth our thinking. By introductionof effective method of other countries and refine domestic corporate governance, wecan achieve optimization in function, not in form. Based on this, the author agrees theeclectic theory of corporate governance model.