Exploring On Reasonable Allocation Of Control Rights In Listed Company

Allocation of control right is the core of corporate governance,and how to allocate the control right has a more profound meaning for listed companies which has a large economic size and own a special economic status.Equity structure,especially the distribution of voting rights directly determines the allocation of control right.The theory of Company law and Institutional Economics analyse the allocation of control right from different angle,but eventually explicit the relationship between control right /equity structure and voting rights.The allocation of control right always centres on the equity structure and the distrubition of votes in the development history of corporate institution,and in the listed companies in our country presently also showed the high bonding between control right/ equtiy structure and voting rights.Company development is not always in a stable state,and transfer of control right is the main content in company's external governance structure.Whether in the transfer of control right or in the struggle of control right,whether the various anti-takeover measures in acquisition or the advanced design in the corporate governance,all these measures are based on the equtiy structure and distrubtion of voting rights.At present,the allocation of control right in listed companies are in a delimma to a certain extent,and which present different forms in the state-owned listed company and private listed company.Under the influence of enterprise development process and the mode of administration,state-owned listed companies generally have a single-large shareholder in equity structure and preference for control right,which weaken the function of internal and external governance institution.The reform on modern corporate governance structure in state-owned listed companies needs to reduce state-owned stock in some fields,but in consideration of the social economic function which state-owned listed companies burden,it is necessary that the state-owned listed companies reserves a certain degree of control right.So,how to harmonize the company nature and the social functions of state-owned listed company is of vital importance in the allocation of control right.In private listed companies,expansion of financing leads to an increasingly fragmented equity structure,but the "one share-one vote " allocation principle conflicts with the founder`s preference on control right,which given rise to the emergence of “pyramid equity structure”,but disadvantages and potential risks of this kind of equity structure still can not be settled and it should be replaced by a better new system.At the same time,the founder`s preference on control right strongly conflicts with the outside investors`s pursuit on benefit of control right,which leads to contest for corporate control right,and the disordered competitions have adverse effects on the company and shareholders.Thus,how to coordinate the contradiction between the requirements of corporate financing and the stability of control right and how to orderly transfer the control right is important in the allocation of control right in private listed companies.Based on the relationship between the allocation of control right/equity structure and distribution of voting rights,theoretically,the optimization of equity structure become the essence of rationalization of control right.Traditionally,the optimization of equity structure focus on equity concentration and balance degree,namely who is shareholder and how much share he hold.In fact,the stake is a basic unit in the equity structure,and equity is a form beam of a series of shareholders' rights.How to allocate the shareholders` rights will directly affects the significance of the equity structure.So,diversified shareholders' rights should be an improtant aspect in equity structure,and which presented as classes of stocks.As the independence character and powerful force of voting right becoming prominent,designing on voting rights will provide a more efficient means on allocation of control right.There has appeared some institutions such as “golden shares” /preferred stock and so on.As a means of allocation of control right,when designing the specific voting shares of class we should coordinate the special protection for minority shareholders and optimization of stockholder`s interests and keep balance between company autonomy and state compulsory.Also building up the basic legal framework from the macro level and at the same time giving corporation certain autonomy right are important,which will ensure the flexibility of corporate goverance and motivate development of company system.