The Board Of Directors Of Listed Companies In China, Analysis Of Senior Management And Incentive Mechanism Design

It is competitive world and global economic that indicates comprehensive national strength more competitive. The economic power is an important factor of comprehensive national strength, which relates with listed company performance that badly concerned by people. As content of economic reformation, modern enterprise system's foundation and improvement calls for normal corporate governance.Emphasized on boards and managements, this article discusses the background of corporate governance and analytical tool: principle—agent theory. And looking back domestic and abroad research result of corporate governance, according to our fact, further analysis. With listed company data, it describes the scale, structure and conduct of board of directors and management, also estimates their relations to performance. Taking 3 years panel data of listed companies in Shanghai and Shenzhen for sample in principle and agent theory (closed on December 31, 2003), examines governance efficiency and performance of listed company. And discuss the possibility of corporate governance and performance at the same time.The research result indicates there is difference between the conclusion from data and classic theories. Listed companies in China influence by major shareholder, state-owned property, stock structure, independent director control and so on. Main characters are, all boards' ownership is very low, even none in many chairmen of directors, so our listed companies have no-long-term promotion. Neither do managements and general managers that hold less than 0.5 percent and 0.1 percent. That could be followed by short-eye sighted behavior and affect company development. The separable arrangement of GM and Chairman of director is 70.9%, 72.5% and 70.9% in year 2002, 2001 and 2000. The duties of them are more normal and clear. But stock share is yet serious excessive as CH₁₀ own 35-90% stock and first shareholder holds more than 80% of top ten's in about half of listed companies.Finally, it puts forward counter plan solution, aimed at governance problem, includes: Realizes ownership diversification, clarifies represent of SO-ownership, as to protect shareholder benefit, and control "inner director control"; leads independent directors system to enhance directors' character and function of supervision; sets up competitive human resource market to train professional "made in China" manager; by the ways of right of obtain surplus , control and reputation, carries out performance benefit mechanism that delays or not to improve the incentive constraint mechanism.