Research On The Effect Evaluation And Performance Improvement Of The Secretary Of The Party Committee Holding Concurrent Post As The Chairman Of The Board Of Directors In The State-owned Enterprises

Since the 18 th National Congress of the Communist Party of China(CPC),under the background of exercising full and strict governance over the CPC,the leadership of CPC over state-owned enterprises(SOEs)has been continuously strengthened,and the role of Party committees in SOEs has been effectively consolidated.In 2015,the Central Committee of the CPC and the State Council issued “The Guiding Opinions on Deepening the Reform of SOEs”,which made a new and comprehensive deployment for the reform of SOEs,and required the secretary of the Party Committee to hold concurrent post as the chairman of the board of directors(“two positions into one”)for the first time.The “two positions into one” of SOEs can promote the full integration of Party organization governance and corporate governance through the top-level integration,and then give full play to the advantages of “two-way entry and cross-appointment” to realize the goal of two “consistencies”.This is an important arrangement made by China after the “two-way entry and cross-appointment” in SOEs more than 20 years ago,as well as an important arrangement to embody the “role of leading core and political core” of Party organizations and to better implement their legal status in the corporate governance structure in SOEs,and also the key to realize the organic integration of Party organization governance and corporate governance and to promote the healthy,rapid and sustainable development of SOEs.At present,regarding the research of the influence of “two positions into one” on SOEs,only some scholars involved relevant contents by comparative study on different way of “cross-appointment” of the secretary of the Party Committee and the chairman of the board of directors.However,due to the wide spread use of traditional regression methods for estimation,it is impossible to effectively eliminate selection bias of samples and other factors of interference,and the conclusions drawn can only show that the “two positions into one” has advantages or shortcomings in some aspects compared with other ways of “cross-appointment” of the secretary of the Party Committee and the chairman of the board of directors,but can not determine whether the differences between them were due to the “two positions into one”,or due to the enterprise’s own factors and other factors.At the same time,the perspective of research diverges.The researches above did not focus on the main responsibilities of the secretary of the Party Committee and the chairman of the board of directors respectively,and referred to theme of enterprise risk,operational efficiency,market value,decision-making,agency cost and other aspects,which resulted in great differences of research conclusions.In view of this,this paper focuses on the institutional arrangement of “two posts in one” of SOEs,and bases on the responsibility of the first responsible person of Party construction and anti-corruption of the secretary of the Party Committee and the main duty of enterprise operation of the chairman of the board of directors,according to the research approach of “determining the theme,analyzing the problem,studying the problem,solving the problem and making suggestions”,to evaluate the effect of the“two posts in one” on the aspects of the corruption risk and performance of SOEs,explore effective solutions to improve the performance,and make corresponding suggestions.Firstly,On the basis of extensive and in-depth literature research and theoretical analysis combined with principal-agent theory,stakeholder theory,incentive theory,tournament theory and upper echelons theory,some hypotheses of the research are put forward.Taking the SOEs listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange as the research samples,on the basis of determining the final research sample by the propensity score matching method,this paper realizes the quantitative evaluation of the effect of the “two positions in one” on the corruption risk and performance of SOEs by using the difference-in-differences model.At the same time,in view of the problem that the “two positions into one” can not have a significant impact on the performance of SOEs,this paper explore effective solutions to improve the performance of SOEs of “two positions into one” from two perspectives.One is the role play of the secretary of the Party Committee(the chairman of the board of directors).Considering that “two positions in one” is essentially a non-economic incentive which is able to increase the power and status for the secretary of the Party Committee(the chairman of the board of directors),and its impact on enterprise performance is not direct,basing on the point of the incentive theory about the combination of economic incentives and non-economic incentives and the different standpoints of tournament theory and behavioral theory,this paper researches the salary incentive of the secretary of the Party Committee(the chairman of the board of directors),to explore an effective way to solve the problem of performance improvement of SOEs under the background of “two positions into one”.The other is the upper echelons,considering the key role of general managers in improving the performance of SOEs of “two positions into one”,and the reality of their work under the leadership of the secretary of the Party Committee(the chairman of the board of directors),basing on the upper echelons theory,this paper focuses on the relationship between the general manager and the secretary of the Party Committee(the chairman of the board of directors)of SOEs by two perspectives of economic incentives and non-economic incentives,to explore another effective way to solve the problem of performance improvement in SOEs of “two positions into one” from the power distance and salary gap.Finally,on the basis of summarizing the above research results,combining with the actual development of SOEs,this paper makes some suggestions on strengthening the system construction of SOEs with Chinese characteristics,which provides useful reference for the reform and development of SOEs in China.After the above research,this paper draws the following conclusions:Firstly,the “two positions in one” can significantly reduce the corruption risk of SOEs,but may not have a significant impact on improving the performance of SOEs,and neither external governance environment factors(such as enterprise level,industry,and region)nor internal governance structure factors(such as the size of the board of directors,the size of independent directors,and the size of the board of supervisors)can significantly adjust the above results.In view of this,we should adhere to and deeply carry out the deployment of “two positions into one” on SOEs,pay attention to explore the incentive mechanism in line with the characteristics of SOEs,and strive to prevent the risk of invalidation of internal governance structure of SOEs。Secondly,the salary incentive for the secretary of the Party Committee(the chairman of the board of directors)can significantly improve the performance of SOEs of “two positions into one”,which is mainly manifested in the local SOEs and SOEs in lower competitive industries.At the same time,the gender and educational background of the secretary of the Party Committee(the chairman of the board of directors)can have a significant moderating effect on the impact of salary incentive on the performance of SOEs of “two positions into one”.In view of this,we should pay high attention to and respectively carry forward the salary incentive for the secretary of the Party Committee(the chairman of the board of directors)of SOEs of “two positions into one”,avoid the adverse influence on SOEs by restricting salary on enterprises executives,and integrate the concept of "people-oriented" into the process of salary determination,so as to give full play to the effect of the salary incentive.Thirdly,the power distance between the general manager and the secretary of the Party Committee(the chairman of the board of directors)can have a significant converse-U impact on the performance of SOEs of “two positions into one”.The salary gap between the general manager and the secretary of the Party Committee(the chairman of the board of directors)can have a significant negative impact on the performance of SOEs of “two positions into one”,which is mainly manifested in local SOEs and the SOEs whose general manager holds no stocks.In view of this,we should coordinate the relationship between the general manager and the secretary of the Party Committee(the chairman of the board of directors),strengthen the rational allocation of power and the scientific distribution of salary,and implement policies according to the enterprise conditions and combine with stock incentive organically in the process of salary incentive,so as to better improve the development level of SOEs of “two positions in one”.This paper has the following innovations:Firstly,this paper constructs a theoretical analysis framework of the institutional arrangement of “two positions in one” and conducts empirical research systematacially for the first time,including the effect evaluation and the performance improvement,which fills the research gap in this field,which provides a new perspective for the sinicization of corporate governance theory.Secondly,this paper realizes the quantitative evaluation of the effect of the institutional arrangement of “two positions in one” of SOEs for the first time,and finds that this institutional arrangement can significantly reduce the corruption risk of SOEs,but may not have a significant impact on improving the performance of SOEs,which provides a new basis for the institutional construction of SOEs with Chinese characteristics.Thirdly,this paper discovers the important role of salary incentive of the secretary of the Party Committee(the chairman of the board of directors)for improving the performance of SOEs of “two positions in one”,reflects the negative impact of salary restriction policy,and explains the problem that “two positions in one” can not significantly impact the performance,which provides a new direction for improving related mechanism of “two positions in one”.Fourthly,this paper opens the black box of the influence of the relationship between general manager and the secretary of the Party Committee(the chairman of the board of directors)on the performance of SOEs of “two positions into one”,and finds that the power distance between them can have a significant converse-U impact on the performance and the salary gap between them can have a significant negative impact on the performance of SOEs of “two positions into one”,which provides a new dimension for the further development of the upper echelons theory.