China's Private Listed Companies' Governance Structure

Through systematical study upon the corporate governance of China's private listed companies, this thesis attempted to answer the question how to improve them, and offer some experiences for other private enterprises and reflections for the corporate governance reform of China's stated-owned enterprises as well.The author firstly surveyed the previous researches on the concept of corporate governance, the principle-agency theory and other related theory of corporate governance in order to construct the theoretical basis of this paper. And then the author reviewed the four major corporate governance models in the world. In doing this, the author discovered three conclusions, which is that perspicuity rights and responsibilities is the core of modern corporate governance mechanism, board of directors plays the key role in the entrusted responsibility, and an effective corporate governance mechanism needs a good economics and institutional environment. The models of corporate governance are different in different countries and different phases.Since the reform and open policy, the development of China's private enterprises catched most people's eyes all over the world. Before going into the stock market most private enterprises carried out family-governance, but when they became listed companies, all of them face the problem how to transfer family-governance to modern corporate governance.Generally speaking, the corporate governance of China's private listed companies is better than those of stated-owned companies, whereas, China's private listed companies are in the same transform institutional environment, so it is inevitably strap on some disadvantages.The ownership structure of China's private listed companies is comparatively concentrated from the view of internal governance mechanism, among of them, some are family-firms entirely controlled by a family. This kind of ownership results in the failure of board of director function and major shareholders exploiting the interest of minority shareholders and other stakeholders.From the view of external corporate governance mechanism, China's private listed companies face with the problem of the failure of enterprise market, the lag of take-over market, the infantility of capital market and so on.In summary, the corporate governance of China's private listed enterprises needsto be promoted in every aspect, but we can't copy any other countries' model. The construction and development of it dependent on the progress of China's market economic system and the development of private listed companies themselves.The author got some conclusions in the end:The first, the ownership structure of China's private listed companies is comparatively concentrated, but it vary largely between companies. Other major shareholders can restrict the largest shareholder's autarchy and then promote the corporate governance of China's private listed enterprises.The Second, most of board of director of China's private listed companies are controlled by the largest shareholder, especially in family-enterprises.The introduction of independent directors increased the independency of board of directors.The third, the inspiring-restrict system of China's private listed companies is comparatively effective. As for family-enterprises, the trade-off model which means family and manager share the control rights is the prevalent evolution path.The fourth, China's take-over market developed rapidly in recent years, but it still lag the development of capital market. The main question is stated-owned stock and corporation stock can't be exchanged.The last, the fundamental conflict of China's private listed companies is between major shareholders and minority shareholders, not the agent problem between managers and major shareholders.The Creations and methodology of this thesis:First, this thesis facued on corporate governance of China's private listed companies, what's more, it compared the corporate governce of state-owned listed companies and private listed companies.Second, the thesis attempted to investigate developed courntries' corporate governance and then compared them with those of China's private listed companies.The author discovered that corporate governance of China's private listed has some special charecteritics because of the faultiness of socialist martket economy system.The last, the author analyzed the reason,means and degree of exploitation between large shareholders and minority shareholders in China's private listed companies,and then argue that the main question of corporate governance of China's private listed companies is the confiliction between large and minority shareholders, not the agent problem between managers and shareholders.The methodology of this thesis is demonstrative and comparative analysis.The structure of this thesis is as follow:Chapter one: Introduction advances the topic of this thesis, explaining why choice corporate governance of private listed companies as the investigating objection.Chapter two: corporate governance (literature review) introduced the principal agent theory and other correlative theory about corporate governance.Chapter three: the author investigated the four major governance model and some conclusions were obtained.Chapter four: the primary study of China's private listed companies. In this Chapter the author focused on what's the private listed company, the course of China's private enterprise going into stock market, the governance characteristics of private enterprises before going into stock market and after going into stock market.Chapter five is the analysis between the state-owned listed enterprises and private listed enterprises. Generally speaking, the governance of latter is comparatively better than the former.Chapter six: the ownership structure and governance performance of China's private listed companies. In this Chapter the author argue that the ownership structure of China's private listed enterprises is concentrated, which is seasoned with the lack of protection on minority investors' interest in China. Comparatively concentrated ownership structure makes the internal governance mechanism effective.Chapter seven is about the external and external governance mechanism of China's private listed companies. The author focused on the relationship between the scale of board of directors, the structure of board of directors and governance performance.Chapter eight: the exploit between major shareholders and minority shareholders. The author discovered that the exploit between them is very serious through demonstrative analysis.Chapter night: the conclusion and further ways...