Study On The Corporate Governance Performance Based On Employee Stock Ownership Plan

The arising of the modern corporate system leads to the separation of ownershipfrom management in corporations, which results in the question of agency costs.Corporate governance comes out following these problems. So scholars and operatorsalways pay closely attention to the way to increase corporate governance performanceto promote the continued development of the corporate. However, the status quo ofcorporate governance is not good, such as the phenomenon of ineffective of internalsupervision，single big holder，inside control and so on, which can prevent thedevelopment of the corporate. In the same time, the competition among companies ismainly market share, which depends on the competition of knowledge and technology.While human capital is the carrier of knowledge and technology with the character ofprivate and unique. So human capital can also not be replaced in the corporategovernance performance, and Employee Stock Ownership Plan is the specificperformance of taking human capital seriously. The listed companies are facing to themore and more complicated competition environment, and the good corporategovernance can not only assure the survival of the company, but also promote thedevelopment. So it is meaningful to study on the corporate governance based on theemployee stock ownership.Firstly, this dissertation discusses the corporate governance theory and status quoand points out the pursuant theory and the reason of the study of corporate governance.Secondly, this paper expounds the relation between employee stock ownership andcorporate governance performance. In order to validate assumptions, this paper, choosescorporate financial index as the evaluation index of the corporate governanceperformance by using Principal Component Analysis. This dissertation designs twoempirical studies to verify the long-term effect and short-term effect of the employeestock ownership to the corporate governance performance. In every empirical, thesample of the listed company is divided into state-owned enterprises and nonstate-owned enterprises to be compared. The first empirical study is base on that theemployee stock ownership is a long-term incentive method. This dissertation selects theemployee shareholding from2001and ignores the increase and decrease in the period ofstudy, using the cross-section data in2012to analyze. The second empirical study measures the long-term effect of employee shareholding. Because the data have notbeen disclosed completely and the reform of non-tradable shares, this paper, selects thefinancial data from2006to2008and the employee shareholding, managementshareholding to study on the effect of corporate performance. The empirical resultsshow that: the employee shareholding cannot promote the corporate performance bothin long-term effect and in short-term effect. Then this dissertation analyzes the testresults and explains the reason of it. Finally, this paper gives researching conclusion andputs forward some relevant suggestions, and points out the innovation and deficiency ofthe paper.