Study On The Protection Of Controlling Right Of Founding Shareholders

In recent years,with the development of China’s economy and the continuous deepening of economic system reform,the role of the private economy has become increasingly important.More and more founding shareholders choose to solve some capital problems in enterprise development by going public.The shares of listed companies can be circulated freely,and some investors have an impact on the control of the founding shareholders through the trading of shares.In recent years,incidents of control rights scrambles among founding shareholders have been common,such as the "War for Wanbao" and Gome Inc.The battle for control has two effects.On the one hand,the incident of control over contention can sound a wake-up call for the founding shareholders,enhance their sense of crisis,and urge the founding shareholders to work harder to operate the enterprise.On the other hand,the scramble for control of founding shareholders can also have serious consequences.After the founding shareholders’ control rights are attacked,the founding shareholders will focus their attention on the struggle for control rights,which will have a significant impact on the company’s financial performance,market performance and corporate governance structure.At the same time,with the growth of the company,the founding shareholders not only invest financial capital,but also invest a lot of key resources: such as social capital,intellectual resources,etc.These resources are highly specific.If the founding shareholders lose control,these resources may be difficult to play a role,which will affect the development of enterprises.Therefore,the research on the protection of founding shareholders’ control rights has important practical significance.Current scholars have carried out relevant research on the control of founding shareholders.Relevant scholars analyze the control of the founding shareholders and the company ’s financial factors to study how the founding shareholders control the role of the company;some scholars take the event of the founding shareholders ’control rights as the research object,and combine the cases with the founding shareholders’ control rights.Analyze the reasons and processes of the competition,and make suggestions on how the founding shareholders maintain their control.There are also scholars who conduct research on the voting rights system and protect the founding shareholders ’control rights through the system.However,there is little research on the question of which characteristics of the founding shareholders’ control rights need to be protected.The issue studied in this article is: Does the controlling power of the founding shareholders need to be protected? If protection is needed,what characteristics of the founding shareholders’ control rights need to be protected? In order to solve these two problems,first of all,we study whether the performance of the company where the founding shareholders have control is better than the performance of the company where the founding shareholders do not have control.If the company’s performance is better,the control needs to be protected.Secondly,we further study whether the performance of a company that has certain characteristics of founding shareholders in control is better than that of a company that does not have such characteristics,and if the company’s performance is better,it means that the founding shareholders with such characteristics the control of shareholders needs to be protected even more.Through empirical testing,we found that the founding shareholders have control,and the company shows better performance,so the founding shareholders’ control needs to be protected.Further research has found that the founding shareholders have psychological ownership,value corporate culture,have a technical background,and a high academic background.They have control and the company often has better performance.Therefore,the founding shareholders with these characteristics should be protected.However,we found that authoritative founding shareholders holding control did not significantly improve the company’s performance.This article innovatively studies the protection of founding shareholders from the perspective of the characteristics of the founding shareholders,and empirically studies the different degrees of control protection of the founding shareholders with different characteristics,which will provide reference for the protection of control rights.This article studies the control of founding shareholders.First,the literature on the field of corporate governance control rights is expanded.Secondly,it provides a reference for how the founding shares can better control the system,which is helpful for the founding shareholders to use different methods to protect the control right in the process of business management.Finally,it can provide theoretical support for future policy changes on the protection of control rights in China.