The Study On Lianhua Company's Corporate Governance Solutions

The study on "corporate governance" is a hot topic on which economists and jurists have been focusing in recent decades. Corporate governance has become one key element in improving economic efficiency and growth as well as enhancing investor confidence.Corporate governance derives from the modern company's property structure. The separation of ownership and managing rights makes it necessary to establish the mechanism of balance of rights within a company. From the viewpoint of agency theory, corporate governance is the mechanism for solving all kinds of agency problems within a company.Corporate governance involves a set of relationships between a company's management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Corporate governance framework embraces the subjects, objects and system of corporate governance. The presence of an effective corporate governance system, within an individual company and across an economy as a whole, helps to provide a degree of confidence that is necessary for the proper functioning of a market economy.The author struggles to analyze Lianhua Company' s problems based on the agency theory, corporate property structure and corporate governance framework. Inside Lianhua Company, the shareholders have no control over the management and its board, the chairman of the directorate has gained extreme power, there' s no balance or supervision inside the company, or else...