Research On Location And Balance Of Real Control In Modern Corporate

Controlling rights is an important topic for modern enterprise theory. According to the different source, controlling rights could be divided into two kinds, and they are formal control and real control. The former one derives from ownership, and belongs to shareholders. And the later one derives from mastery over the information for operation and management, and it belongs to top managers (include board of directors and CEO). In the practice of modern corporate governance, rights of operation separate from ownership, which make the shareholders and formal control couldn’t play a useful role, and actually the controlling right for corporate is then in charged of board of directors and CEO. So it is very important to research the real control which is controlled by board of directors and CEO.Board of directors will share the real control with CEO, and if one part has more control, the other would have less. Undoubtedly, it would exert negative effects in corporate performance if real control between the parts were unbalance. Just because of this, more and more scholars that come from domestic and overseas start to focus on the topic of real control. Takes Chinese listed companies as the research objects, this paper discusses some reasons that could influence location and balance of real control, moreover, we will discuss the effect that these reason would impact on performance. At the end, in order to make the real control keep balance, we will give some suggestions based on management practice for Chinese listed companies. This paper contains five chapters. The introduction is in Chapter1; In Chapter2, there are some correlation theory, include corporate power theory, corporate control theory, and corporate governance theory; In chapter3,we will analysis the seasons which would influence the allocation and balance of real control, and furthermore, we will analysis the effect that these reason would impact on performance; The empirical research is in chapter4,which contains840sample companies’data, and we will analysis the effect above from the perspective of positivism; In chapter5, We will inductive research conclusions and gave some suggestions based on the practice of Chinese listed companies.According to theoretical and empirical research, we consider that do as the following ways could make real control keep balance:(1) Increase the proportion of independent directors;(2)Improve the ability of independent directors;(3)Increase the number of effective meetings of the board of directors;(4)Increase the size of the board of directors;(5)Make CEO separate from chairman completely;(6)Increase the ownership concentration. In practice, there are some deficiencies for allocation and balance of controlling rights, which would restrict the growth of company performance, and so we will gave some suggestions based on theoretical analysis and empirical research. These suggestions are as follow:Improve internal allocation of the real control; Enhance the internal balance of company control; Improve the internal governance; Improve the external governance and so on.