The Research Of Corporation Governance Under The Dual-Class Share Structure

Dual-class share structure breaks the principle of “one share one voting right”, the equity principle of equality, which makes same shares have different voting rights. Many countries in the world gradually let go of the limitation on the dual-class share structure, allowing companies adopt this kind of share structure. This is the system arrangement to meet the needs of the securities market innovation, adapt to the market demand for corporate governance innovation.This article in the introduction part introduces the joint-stock company of our country in the practice of foreign exchange on dual-class share structure and the research status of domestic and foreign scholars on dual share structure.The first part of the body elaborates on the meanings of dual-class share structure, and on this basis, comparing Proxy Solicitation and Alibaba group' "partner" with dual-class share structure is that highlights the Dual-class share structure with unique advantages in keeping corporate control. In addition, through comparing with the traditional single share structure, dual-class share structure has following value: resolving the contradiction between equity financing and corporate right of control coexist, preventing a hostile takeover, reducing agency cost between shareholders and managers because of the high dispersion equity, and promoting equity separation in our country, etc.Corporate governance is the core issue of company law; also, the equity structure is a core issue of corporate governance. In the second part of this article, the author intend to analyze several kinds of typical corporate governance modes detailed in order to conclude that fair, autonomy is company's governance concept. Dual share structure is a kind of corporate governance innovation; without limiting the company adopting dual share structure corresponds to the autonomy concept of the traditional corporate governance. But dual-class share structure gives shareholders with different voting rights, violates the equality concept of company law, which, as a kind of private law, should adhere to.Combining with the current status of development of the capital market in our country, the third part of the body analyzes adverse effect on corporate governance, when the incorporated company adopts dual share structure. The first adverse effect is that dual-class share structure give the company's founding shareholders voting rights,which is not matching their contributions, the probable consequence is that the founding shareholders probably abuse control of company, seize the assets of the company, damage the interests of small and medium investors; The second adverse effect is that adopting dual-class share structure probably influence the interests of stakeholders, if staff incentive mechanism is imperfect, the worker has difficult effectively participating in corporate governance, the corporate governance will not work, at last,it will influence company's creditor's rights financing; The third adverse effect is that the founding shareholders of the company and its operator of their leadership are easy to delay in performing the responsibility of loyalty and diligence, which is not conducive to the company's long-term development; the four adverse effect is that dual –class share structure is easy to cause the interests of the shareholders "heterogeneity", weaken the supervision of the shareholders to the company's operators, weaken the supervision mechanism of corporate governance.At present, the law of our country does not allow the company adopts dual share structure, the theoretical circle of our country has not yet reached a consensus about adopting the dual share structure, and the main differences concentrate on the protection of the small and medium-sized investors. The author suggested by the following measures to improve the company's internal and external governance mechanism in order to protect the small and medium-sized investors, to perfect related mechanism for the future when the company of our country adopts dual share structure. internal governance mechanisms includes vote resurrection mechanism of shareholders, encouraging small and medium-sized investors to participate in corporate governance by the implementation of the online voting system, strengthening information disclosure responsibility by strict information disclosure system; External governance mechanism includes increasing the channels of small and medium-sized investors to fair quit the company by introduction of shareholders cash option, setting up specialized court to deal with investment disputes and strengthening cooperation with securities regulatory commission and the stock exchange to overcome the obstacles of professional 's lack and of information asymmetry, for small and medium-sized investors can get better judicial relief.The fifth part of the body points out the prospect of the development of the dual share structure in our country, in the future, with the improvement of the internal and external corporate governance mechanism in our country, company should be allowed to adopt dual share structure, to conform to the requirements of innovation in the capital market.