Study On Evaluation System Of Small Shareholders’ Rights Protection Based On Annual Report

With the change of ownership structure of the listed Corporation from scattered to concentrated, the core issue of corporate governance has shifted from the traditional conflict of interests between managers and owners to large shareholders and small shareholders. “Protect the rights of small shareholders is to protect the rights of all shareholders”. However, in our country, as vulnerable groups of the Stock market, small shareholders’ rights are often infringed. Therefore, research how to protect small shareholders’ rights is very important to maintain small shareholders’ investment intention, and also important for the healthy development of Stock market. This paper will construct evaluation system for measuring the degree of protection of small shareholders’ rights, based on the theory of investor protection and the rights invasion hypothesis. The information comes from annual reports of China’s total listed Corporation from 2011 to 2014.Annual report reflects the listed Corporation’s annual production and operation performance, financial situation and other circumstances, it is not only the core of the listed Corporation’s information disclosure system, but also for small shareholders, it’s the direct way to understand the company’s operating conditions. At present, the domestic and foreign scholars have studied the protection of small shareholders’ rights from the national macro level, such as the legal construction, it is difficult for small shareholders to acquire and master the methods to measure the degree of protection. Therefore, this article choose annual report of listed Corporation as the breakthrough point, build the Evaluation System of small shareholders’ Protection, it’s not only can fully reflect the operating conditions of the listing Corporation, but also can be easily obtained by the small shareholders. On the basis of studying the annual reports of listed Corporation, this paper selects 10 specific indicators from four aspects: corporate governance, external supervision, enterprise value and the rights of shareholders. Through Linear regression, this paper tested the correlation between small shareholders’ rights protection system and the returns of the listed Corporation, joined the asset size, business nature, industry, market risk as control variables.The paper build an evaluation system of small shareholders’ Protection, and tested the validity, the results showed a positive correlation with the listed Corporation’s stock returns of next year. Through the Evaluation System, small shareholders can be more active to evaluate the degree of protection for small shareholders of the listed Corporation.