Research On Employee Participation In Corporate Governance In Private Listed Companies

With the advent of the era of knowledge economy,the competition between companies becomes much more intense.An increasing numbers of companies have recognized that the competitive advantage of an organization comes from its unique,rare and valuable human resources.The role played in the corporation,especially in the corporate governance by the employees,who are the owner of the human resources,are catching more and more attention from the theorists and practitioners.Throughout the corporation revolution worldwide,it is noticeable that there is a gradual transformation from the unilateral governance mechanism,which aims to maximize the interests of shareholders,to the multilateral governance mechanism which encourages more participation from the employees in the corporate governance.This staff participation in corporate governance is especially in line with our cultural environment since China is a people-oriented society.The private economy is an important part of that of our national.By direct public offering or alternative public offering,private companies not only alleviate the financing difficulties themselves to some extent,but also greatly active the country's capital markets.China's private listed companies,however,are characterized by the serious internal control from the large minority shareholders.The interests of medium and small shareholders,especially the interests of the employees,cannot be guaranteed.A serious crisis emerges in the governance mechanism of private listed companies.Calls for the reform of private companies,especially for the internal governance mechanism to allow employees to participate in corporate governance are growing.Therefore,it is of a very important practical significance that studying how to play the role in corporate governance for employees,for improving the efficiency of China's private listed companies,safeguarding the legitimate rights and interests of employees,and promoting the healthy and rapid development of China's capital markets.In this paper,we study the issues of employee involved corporate governance in private listed companies using a combination of theory and practice method.The purpose of this investigation is to provide suggestions to enhance the employee participation in corporate governance and improve the efficiency of the corporate governance of China's private listed companies,by studying the current status and the existed problems of employee participated corporate governance in China's private listed companies,and comparing with the experience in developed country markets.Firstly,we define the employee participated corporate governance and private listed companies.Secondly,we select the panel data of 128 private companies listed in the Shanghai and Shenzhen Stock Exchange from 1992 to 2012 and describe the basic characteristics of employee participated corporate governance using descriptive analysis method.Then,we analyze the situations of employee participated corporate governance in Germany,Japan and US companies.Based on the analysis,we propose several suggestions to perfect the employee participated corporate governance in China's private listed companies.Finally,we summarize the paper and point out the insufficiency of this paper and the direction of future research.