A Study On The Effectiveness Of Corporate Governance Under The Dual-Class Share Structure Of Internet Enterprises

With the announcement in 2018 that the Hong Kong Stock Exchange would accept the listing of companies with different shareholdings,there has been a historic change in the policy on listing shareholding structures applicable to Chinese companies.The dual-class structure has been favored by many Internet companies by setting up special voting rights that allow founders holding a small amount of equity to own the vast majority of the voting rights of the company and thus remain in control of the company.However,the dual-class share structure remains widely controversial in academic circles,with some scholars arguing that while such a system can leverage the human capital of founders,it can harm the interests of minority shareholders.China is now in the initial stage of introducing dual-class share structure,and the implementation and improvement of dual-class share structure in China’s Internet companies is a difficult process,so it is important to study the impact of dual equity on corporate governance and how to better use the dual equity structure system to improve corporate governance at present.In this context,this paper takes Meituan as the research object,evaluates its corporate governance effect under dual-class share structure and proposes improvement suggestions.Firstly,this paper composes the relevant research results on dual-class share structure and corporate governance,introduces the theory of principal-agent,control,shareholder heterogeneity and human capital theory,and provides theoretical support for the subsequent case study.Secondly,it introduces an overview of the implementation of dual-class share structure in Internet companies and provides a specific analysis of the setup,implementation motives and influence path of Meituan’s dual-class share structure.Then,a set of evaluation methods applicable to evaluate the effect of dual equity governance is summarized according to the impact path of Meituan’s dual equity structure on corporate governance,i.e.,the specific analysis of the equity structure,board governance and management governance as well as the changes of financial and non-financial indicators before and after Meituan’s implementation of dual equity structure is carried out from three dimensions of corporate governance structure,financial performance and non-financial performance to study the effect of corporate dual The study finds that the dual shareholding structure has a significant impact on the corporate governance of Meituan.The study finds that the dual equity structure has a positive effect on the corporate governance of Meituan,on the one hand,it improves the governance efficiency of the company by stabilizing the control of the founders and gets a good positive effect on the level of internal governance effect of the company;on the other hand,it maintains the long-term development strategy of the company and the financial indicators are improved to some extent;the dual equity structure is also beneficial to the development of Internet companies,but the dual The dual shareholding structure is also beneficial to the development of Internet companies,but there are certain governance risks associated with the dual shareholding structure.Finally,based on the risks of dual shareholding structure,we propose corresponding improvement suggestions,hoping that this paper can provide some realistic inspiration for the design of shareholding structure of China’s Internet enterprises and the supervision and policy formulation of relevant departments.