Limited Effect Of Corporate Governance

Corporate governance refers to system that when the enterprise ownership and management are separated, how the relationship of owners, board of directos, managers and other stakeholders should be arranged. At present, most of the research and practices consider that corporate governance can solve a variety of problems about rights and responsibilities. And most of liratures study corporate governance from the aspect of stock right, independent director and so on, and then conclude stock right should be optimized or suggest other solutions. Besides, law of America, China and other contries, and listing standards of security exchanges require that public companies should establish coporate governance. However, there are still some financial frauds or tunneling in the form of related party transactions.In March2013, the news of Suntech bankruptcy reorganization, made the photovoltaic industry and people interested in financial surprised. Suntech was the leader of photovoltaic industry, has a famous chairman, was supported by government in capitl and human resources a listing company on NYSE, and was supervised strictly. But it was reported that the elated party transactions had a large impact on Suntech, so the corporate governance of Suntech was doubted seriously. Then this paper discusses overseas-listed Chinese companies. They are liste in America, some of them even are pride of industry, but there were still financial frauds, incomplete information disclosure, and delay of submitting financial report, SEC investigation or litigation and so on. According to the regulatory requirements, the corporate governance of these companies should be perfect, but on the contrary, why there are still so many provlems? What is the role of corporate governance?This paper first introduces the concept, principle, literatures, law and regulations about corporate governance. Second, it introduces the development of Suntech, financial analysis, major wrong decisions and related party transactions of Suntech. Third, it describes the corporate governance of Suntech and discusses the limited effect of corporate governance on the basis of Suntech. Finanly, it discusses the effect of corporate governance in the sample of overseas-listed Chinese companies.