A Study On Internal Corporate Governance Mechanisms Of Chinese Private Listed Enterprises---a Perspective From Small And Mediumsized Private Enterprises

Based on the research framework of corporate governance,this paper discusses two important subjects of corporate internal governance mechanisms from a perspective of small and medium-sized private enterprises,including ownership structure and executive compensation.It provides some summary statistics and analysis on these two subjects of the data collected from Chinese listed private enterprises,together with a case study on one enterprise in the sample,which can shed some lights on the question how small and medium-sized private enterprises should build their corporate internal governance mechanisms.The sample listed private enterprises are tightly controlled by entrepreneurs and related family members,in terms of both ownership structure and executive team.Firstly,the listed private enterprises were largely founded by entrepreneurs and got listed by IPOs.Most of the firms have relatively simple ownership structure with one to two levels of corporate pyramid.The controlling shareholders have relatively high percentage of ownership and controlling rights,but the degree of divergence of ownership and control rights is not negligible.The second large shareholders have limited ownership to counteract the controlling shareholders.Secondly,family members are active in the executive team of the sample enterprises,while executive shares holding as an incentive scheme is not popular.Thirdly,the case study elaborated the efforts of this firm on improving its corporate governance before it went public.These Chinese listed private enterprises can be regarded as a group of successful ex-small and medium-sized private enterprises,which have built and improved internal corporate governance mechanisms as they developed into listed enterprises.The analysis on these listed private enterprises can shed some lights on the question how small and mid-sized enterprises build the internal corporate governance mechanisms and pave the way for founder succession.