Corporate Governance Affect Our Financial Difficulties Of The Company To Resume

With the continuous development of market economy and capital markets, competitionbetween companies has become increasingly intense, resulting in an increasing number oflisted companies due to poor management and operation of environmental degradation andother reasons, financial distress, both to the company’s stakeholders brought serious losses,gave social and economic development caused some negative effects. Profound andcomprehensive understanding to explore the impact of corporate governance on the recoveryof the financial difficulties the company, for the plight of the company out of trouble,maintain shareholders, creditors, institutional investors and other stakeholders in the interestsof strengthening the relevant regulatory authorities, government agencies and the communityimportant for regulation of listed companies. In this paper, specific research andimprovements are as follows:First, this article one hundred twenty ST companies (which sixty-seven recovery,unrecovered fifty-three) as an object of study, in order to verify the company’s internalgovernance factors affecting the company’s financial difficulties recovery mode, select theownership Structure, Board of Directors and management features characteristic, institutionalinvestors, and data information disclosure transparency related indicators studied bydescriptive statistical analysis and Logistic regression analysis concluded: In terms of equityinstitutions, a higher proportion of the largest shareholder, when the nature of the controllingshareholder of state-owned shares in favor of the plight of the company out of trouble as soonas possible; in terms of board characteristics, when the board of directors in a higherproportion of independent directors, the Board of Directors at a relatively small scale moreconducive to the plight of the company to resume as soon as possible; in terms ofmanagement features, CEO duality, the higher the possibility of a higher salary plightcompany executives to recover; institutional investors, the high proportion of its holdings ofinstitutional investors and holders shares of the company balance high Zhaimao easier;transparency in information disclosure, the financial statements give a true and high integrityof the company’s corporate quicker turnaround. Second, with regard to verification of the external governance environment affect theway the recovery of the financial difficulties the company is also a study of these onehundred and twenty-related data by ST’s descriptive statistical analysis and Logisticregression analysis method, mainly selected two important indicators of product marketcompetition and governance environment index, the results show that: the level ofcompetition from the product market, the higher the degree of competition in product marketsit easier for companies to get rid of financial difficulties. From the governance environmentindices, the index level of the rule of law and the market index, the index of governmentintervention is more likely to lower the company’s recovery.Finally, based on the results of theoretical analysis and empirical research, we proposethe following recommendations to optimize the company’s internal governance and externalgovernance environment to improve in order to provide reference for the company to restorefinancial distress, specific measures include: internal factors from governance aspects of thecompany, the main there are reasonable control ownership concentration, deepen the splitshare structure reform, maintain proper board size, and gradually improve the system ofindependent directors, executives incentive and restraint mechanisms to strengthen andexpand the scale of institutional investors, regulate the behavior of institutional investors,improve disclosures laws and regulations, improve the information disclosure regulationsystem. From the external environment governance, the main good development ofcompetitive markets, reduce excessive government intervention, so that the relationshipbetween business and government to rationalize and strengthen legal environmentalgovernance areas. In this paper, for in-depth understanding of corporate governance andcorporate governance through rational optimization of internal and external factors related tohelp bail out the company has some enlightenment.