System Of Corporate Governance And Culture

Any innovation of regulation is carried out in the specific path of culture. Different cultural belief and value will determine the different path for the regulation innovation. It is the cultural elements which base on the Christianity culture such as institution private property, spirit of legality, idea of contract, vocation concept of labor and so on that co-gestate the market economy system of western countries, and meanwhile, create general social environment which adapt to the nature of market system. Therefore, the validity of regulation arrangement is dependent on the unity and complementation between regulation arrangement and environment. Legal system and culture tradition have direct influence on proprietary structure which determines different patterns of corporate governance. Hence, legal system and culture tradition play the fundamental role in forming of corporate governance patterns and performing of governance efficiency.From culture tradition, it is difficult for corporate governance system to accommodate itself to Chinese traditional culture because of the different nature between the Confucianism traditional culture and market economy system. The inadaptability mainly expresses in following factors: the conflict between the "home culture" which is regarded as the core content of traditional culture and the corporate governance system which bases on the concept of "right restriction"; "rule by the voice of one man alone" impairs the function of supervisal and restriction of governance structure; "connotation culture" contorts the information transfer system in organizations so that the agent cost gets further increase and governance efficiency plays down. In a word, the difference between traditional culture and governance concept of modern companies is the deep reason of abnormality of corporate governance system in our country. From regulation arrangement, as assignees of company, directors should make a faith commitment to company. It is legal restraint to superior managers including directors for modern corporation law. The efficiency of restriction depend upon an accreditment cultural system which was accepted by the whole society, because as a cultural belief, accredit duty determines human's anticipation and behavior pattern, and further decide the efficiency of legal system. The important reason of shortage of directorate function for company management is that the orientation of central governance pattern for stockholders' conference in our corporation law is contrary to the governance fundamental of the faith commitment to company for the board as a whole.In china, the regulation arrangement like legal representative in corporation law makes the control power legalized for the key person; the shortage of accredit duty of directors and the board leads the inner restriction system of a company to be inefficacy. It is very difficult for government to acquire the information needed by supervision because of traditional "home culture" which further makes outer supervision function to be nominal. Any way, shortages of the function of inner and outer supervision cause companies controlled by inner persons to a considerable degree.