Financial Risk Control, The Two Corporate Governance Structure. Df Corporation

With China's economy globalization, the competition among the enterprises is more and more fierce in the form of large groups or large amount of capital. Meanwhile, along with its fast development the group companies face more financial risks when participating the market competition.Thus, to reduce the financial risks effectively and strengthen the ability to resist the risk is to guarantee the group companies'property safety as well as maximize the potential value.This text makes a research mainly on DF group company, inquiring into the ways to prevent the financial risks of the system management and the technique ways to prevent the financial risks of the system management and the technique ways to achieve this goal under the management structure of the second class body corporate. DF was established in 1984. It covers various fields ranging from medicine textile, equipment manufacture to generate electricity to the construction of the power station. It owns 2 subsidiaries with independent capital, 10 holding companies and 3 professional ones. It is a relatively standard group company under the administration structure of the second class body corporate.In order to survive as well as to gain a big share in the market when confronted with fierce competition, have a sound development and maximize the group value, DF is eager to make a systemic analysis of the financial risk and reduce it to the lowest level under the structure mentioned above.The group company's financial risk exists in many links of the finance activities. For instance parent company sometimes passes risks to subsidiaries such as in connection bargain, non-administration occupation, outward guarantee. Meanwhile passes its risks to parent company too due to its administration failures or loopholes. Based on the financial risk theories and company management theories, the test mainly analyses how the parent company control the financial risks made by the subsidiaries. It still takes DF as an example under the administration structure of the second class body corporate. The financial risks mainly lie in the following aspects:The high liabilities of the subsidiaries and its outward credit guarantee will endanger parent company; the wrong decision due to the improper subsidiary investment will result in the capital loss; information gap between the parent company and subsidiaries will attribute to capital loss too; poor personnel management of the unqualified managers will certainly give rise to ineffective control of the whole staff.Based on the financial risks said above, the text analyses the financial administration, system construction aimed at solving the problem mentioned above effectively. It also gives us a system frame on how to reduce the financial risk under the administration structure of the second class body corporate.In the aspect of financial administration, this text illustrates its ideas in the following 3 layers financial system arrangement between the parent company and the subsidiaries; management structure design; the standardization of its financial administration behaviors. Hence it has a system foundation to reduce the financial risk.In terms of financial management, based on the money raising; investment; funds and the distribution of the benefits, it puts forward various technique ways such as the identification of financial risks, evaluation as well as how to control and deal with the risks.As for the finance information construction, the text suggests the information base constitution, the collection and delivering of the information; information transferring and finding out who is to blame (for the mistakes)In the field of the group management construction, it advices the following strategies: to raise all members'awareness of the risks and to train the professionals to manage the financial risks.