Corporate Governance And The Reform Of SOE

The separation of ownership and control rights would lead to the corporate governance problems, which are closely connected with the reform of state-owned enterprises.The narrow sense of the corporate governance means a kind of supervising and weighing mechanism, while the broad sense of the corporate governance includes not only corporate governance structure but also corporate governance mechanism. The corporate governance is a property rights contract to match the respective responsibilities, the rights and the benefits.The corporate structure includes shareholders and shareholders' meeting, directors and the board of directors, the board of supervisors, managers and employees. The corporate mechanism includes the supervision of the board of director, large shareholders and institution investors, hostile take-over, the market of managers, managers as shareholder, reward plan, debt lever and dividend policy, and the stakeholders.Capital structure is the base of corporate governance. The impact of share rights' structure on the efficiency of corporate governance lies not only in who owns the rights but also in the concentration degree. The characteristics of market-oriented corporate governance mode in the UK and the USA include decentralization and flowing of share rights, relatively restricted external market control, the structure of the board of directors mainly composed by independent directors. The characteristics of corporate governance mode in Germany and Japan include: commercial bank as the main share-holders of joint-stock company, artificial person as share-holders and strict supervision mechanism. The situations of a country, especially law system protecting the right of share-holders, bring great impacts on the structure of share rights and restrict the corporate governance mode. There are many problems lying in the corporate governance of the state-owned enterprises: (1)Owner false set .The way to resolve the problem is to re-mold the main body of state-owned share rights and establish the exertion mechanism.(2)Insider control. The way to resolve the problem is to reform the system of property right and realize the diversification of the property right, reform the system of managing state-owned properties, improve the corporate governance structure.(3)One large share-holder. The way to resolve the problem is to bring in institution investors, strengthen the function of the board of directors.(4)The system of inspiration and restriction is not complete. The way to resolve the problem is to establish the reward package, pay attention to the lasting inspiration to managers.The core issue of the reform of state-owned enterprises is corporate governance, and the direction of the reform of SOE is to establish modern enterprise system. The reform of SOE still needs to deal with some great problems. Currently, optimizing the capital structure of SOE is badly needed. The emphases of SOE are to improve the system of managing state-owned properties furthermore, develop stock system and realize the diversification of the property rights.