Exploration On The Path Of Bondholders To Participate In Corporate Governance

Bond financing has the advantages of high efficiency and low cost,and is an indispensable financing method in the process of enterprise development and expansion.However,China’s securities legal system has been attaching more importance to the system of the stock market and neglecting the regulation of the bond market.The decentralization and principleization of securities laws and regulations have made it difficult for bondholders to participate in corporate governance through statutory bondholder meetings and the trustee system.In practice,the rights and obligations between bondholders and issuers are generally regulated by the contents of the bond prospectus,but the prospectus is formulated before the bond issuance,which does not fully reflect the will of the bondholders.It is difficult to realize the expectation that bondholders intend to participate in corporate governance through bond contracts.According to the stakeholder theory,bondholders have invested important proprietary assets to the issuer and are important stakeholders of the company.Bondholders and shareholders alike need to face the risk of corporate mismanagement,and as external creditors of the company,bondholders in a position of information weakness need to guard against the double moral hazard from shareholders and company management.Bondholders have the urgency and necessity to participate in corporate governance.Corporate governance itself has been a very thorny issue,the participation of bondholders in corporate governance needs to have a certain boundary,otherwise it will disrupt the normal operation of the company.When designing the path for bondholders to participate in corporate governance,it is necessary to pay attention to the appropriateness,necessity,proportionality,and timing of bondholders’ participation in corporate governance.With proper legal support,the autonomy of will between bondholders and issuers should be respected.In order to solve the current difficulty of bondholders,based on stakeholder theory,under the follow certain principles,we can construct.It is recommended to build a comprehensive and three-dimensional path for bondholders to participate in corporate governance,which including the pre-supervision,mid-event disclosure and post-event accountability mechanisms.First,improve the system for bondholders to participate in the company’s external governance.It mainly involves the improvement of the bondholder meeting and bond trustee system.The improvement of the bondholder meeting includes clarifying the composition of the bondholder meeting,adding the chairman of the bondholder meeting and giving him the right to convene,clarifying the scope of the bondholder meeting,establishing a hierarchical voting mechanism,clarifying the effectiveness of bondholder meetings and exploring ways of remedy for dissenting holders.The improvement of bond trustees includes alleviating the conflicts of interest between bond trustees,issuers and bond holders,and improving the civil compensation mechanism for bond trustees.Second,explore the participation of bondholders in the company’s internal governance.It is recommended that bondholders appoint bondholder directors to issuers through bond contracts.In order to avoid excessive participation in corporate governance,the responsibilities of bondholder directors should also be dynamically changed according to the company’s operating conditions.In addition,it is recommended to add bondholder supervisors.The bondholders’ supervisors may concurrently be the chairman of the bondholders’ meeting.The chairman of the bondholders meeting is stationed in the issuer’s board of supervisors,which facilitates communication between bondholders and issuers,helps alleviate the weak information position of bondholders,and prevents bond default risks beforehand.