Share-splitting Reform And Board Governance Of Public Company: Theory Exploration And Case Analysis

Board governance is the core of corporate governance. Governance of public company's board of directors directly concerns the benefit of company and its shareholders. How to insure the board inner-structure rationally and operating well is the key of board governance. In generally opinion, board governance is influenced by ownership structure,and board structure, as well as supervision and stimulation. There are lots of studies that have been done. But they haven't got the same conclusion.Share-splitting is the product of the special historic background. With the development of China's capital market, it has bottlenecked the capital market developing. The Share Splitting Reform is imperative under the situation. On May 2005, the government required all the public companies to carry out the Share Splitting Reform, thereby explode the ambit between current share and non-current share, and consequently realize all shares tradable.During the time of share-splitting, the status of share-splitting directly influenced the ownership structure of the public companies, consequently influenced the board structure. So the Board of directors was easily controlled by the holding-shareholder. In the other hand, the check and balance of the power inside the board of directors was of no effect and supervision and stimulation for directors was lack, lots of factors integrated induced the board governance inefficient. Share-splitting Reform eliminates the institutional obstacle to China's capital market. It would give advantages to board governance. Meanwhile, Share-splitting Reform would bring some new problems to board governance. And other problems that the reform doesn't involve would be as ever.Under this background, the paper makes study on board governance during the time of share-splitting, analyses the situation after the Share Splitting Reform through the method combining theory exploration with case analysis. The paper suggests that board governance would adapt the ownership structure, be on the principle of independent governance, perfect the director voting system, optimize the structure of the board or directors, perfect supervision and stimulation mechanism and the system of independent directors, insure the board of directors independent, prompt the directors working actively.