The Influence Of The Circulation Of Equity Circulation On The Corporate Governance After The Reform Of State - Owned Enterprises

More and more problems caused by the reform of the state-owned enterprises (SOEs) appear in recent years. The reason is mostly likely to be the irrationality in equity setting after the SOEs reform. That leads to the deficiency of management holdings by reasonable equity transfer settings to solve the first agency problem and in fact the absence of owners in SOEs, which is the result of the dispersed ownership structure, significant difference in shareholders’ holding and defects in incentive mechanism that is caused by the restriction of reform policy and background. This paper has found that the SOEs faced with the phenomenon of management aging, asymmetry rights between the new and old managers after reforming by analyzing the three stages of Nantong Sijian Construction Group CO., Ltd("NTSJ" in short) equity restructuring. Which invalidates the effect of corporate governance. Since the equity transfer setting is the precondition of equity reform. In order to enhance the vitality of the SOEs, the equity transfer setting to optimize ownership structure for a more rational equity structure is of great significance. The author reveals the fundamental purpose of NTSJ’s equity transfer setting is to coordinate the relationship among interest entities and eventually enhance the core competitiveness of the SOE. And that is also the general rules of all the enterprises survival and development.This paper discusses how to establish the complete control system of management holdings to optimizing the equity incentive mechanism by the equity transfer setting and comes the conclusions.1.The equity transfer setting makes the interest of company owners, managers and employees consistent with the company. Which can also help ease the contradiction among them.2. Incentivize the company supervisors, directors and senior managers linked with the company’s short/long performance by the equity transfer setting. That can coordinate the three kinds of people and help strengthen the function of the board of director and supervisor. Prevent the major shareholders controlling the board and reduce the risk of policy making.3. When transferring the company’s equity, the interests of the company creditors and other stakeholders can get effective protection as the transferred equity can be controlled in a certain range and the transaction security can be guaranteed.4. For group governance, the sub company can take personal and small&medium-sized stockholders under the premise of parent company having effective control over the sub company. Which can optimize the sub company equity structure and maximize the profit of the group.