Corporate Governance Mechanisms Of Control Of The Operator's Incentive Constraint

One of the basic characteristics of modern enterprise institution is the separation of ownership of the enterprise and the right of control. To build an efficient structure in an enterprise through which to stimulate and restrict managers adequately and properly comes to the key point of the successful operation. This article defines and differentiates the ownership of enterprise's property and the ownership of enterprise that introduces the indispensability of management structure of enterprise. The essence of management structure is in fact a kind of principal-agent relationship. Since the agent problem is attached more attention in the enterprise's control mechanism, manager won't work for the owner with all his heart. Control right of enterprise can be divided into right of residual and rights of residual control. In the management structure of an enterprise, how to allocate the rights of residual claim and rights of residual control between owner and manager is the important problem in control right mechanism of management structure of the enterprise and the incentive and restrict mechanism. This is also a significant issue met with SOE of China at present. This thesis studies the arrangement situation of ownership of state-owned enterprises (SOEs) on the basis of investigation and data analysis of it and comes to the conclusion as followed: at present stage it is feasible either in theory or in practice for managers in SOEs to participate in the allocation of rights of residual claim by means of annual salary system, equity holding and stock holding system etc. Moreover, the paper also undertake an empirical analysis to demonstrate that managers' participation in enterprises in rights of residual claim and rights of residual control can stimulate and restrict them efficiently so as to enlarge the return on asset, optimize the management structure of the enterprise and realize the win-win situation of owner and manager.