Research On The China National Social Security Fund’s Participation In Corporate Governance Of Listed Companies

ABSTRACT:The internal corporate governance of a listed company is one of the major concers amongst the social security funds/pension funds investment philosophy and the adhering investment systems. In the developed economies, as the active investors, the social security funds/pension funds normally realize their longer-term and stable investment return through actively participation in the invested companies’ cooperate governance, rather than through "voting on the feet". In another word, those big institutional investors are seeking the market inefficiency under the precondition of an efficient market, and then obtain the access return from the market ineffiency. Therefore, the Chinese National Social Security Fund should learn and take reference from the successful experience and painful lessons of those similar global institutional peers. Systematiclly, the research on the internal cooperate governance should be enhanced, and a set of cooperate governace accessment system should be established, which is in line with China’s characteristics. In the mean time, the investment process also needs to be modified. Further more, a set of corporate governance standards and guidelines for the invested listed companies should be formed. On one hand, this cooperate governance system is suitable for the Chinese characteristics; on the other hand, it should be consistent with the international corporate governance trends. At the current stage, the China’s capital market is developing in a right track towards a positive direction, after a series revolution and reforms in2005-2008. Such better market condition provides a better external envioroment for the social security fund to establish a more complete and sound investment system. Conducting a research on the participation of the social security fund to the listed companies cooperate governace is a meaningful task. Based on a thorough theoretical and systematic analysis on the cooperate governance, the panel data in2007has been introduced and analised. Through conducting the correlation analysis amongst the four main factors which can present the cooperate governance effect, namely, company performance, senior management compenstation, information disclosure and devidende policy, a conclusion has been made that the share holding from social security fund is good for enhancing the listed companies’cooperate governance. A series of policy suggestions has been given at the end of this paper in order to better parcitipate in the invested listed companies from the social security fund side.