The Influence Of Governance Mechanism On Performance In "capable People Leading" Cooperatives

Since China’s reform and opening up, new cooperative organizations began to rise and to get attention especially farmers’ professional cooperatives, which are based on the broad masses of farmers’ voluntary choice, independent establishment and self benefit. On July 1, 2007, the Law of the People’s Republic Specialized Farmers’ Cooperative officially issued and implemented, the development of farmers’ professional cooperatives in China into a new stage of the orbit of the rule of law. The development of farmers’ professional cooperatives helps to improve farmers’ organizational level, to promote the farmers’ income and agricultural industrialization management, and to enhance the comprehensive agricultural production capacity and market competition ability of agricultural products, influencing the construction of new socialist countryside greatly. Many types of farmers’ professional cooperatives have emerged in the current China’s vast rural areas. There are farmers’ professional cooperatives called "capable people leading" cooperatives in different types of cooperatives, which are launched by local capable people of agricultural production operators and service including the production of large professional and professional technical people, etc. Due to the relatively backward economic and social conditions of old revolutionary base areas, few production of large professional and professional technical people tend to stand out and organize farmers’ professional cooperatives,becoming a "leader" of the local economy development.This article selects "capable people leading" cooperatives of the old revolutionary base areas in Anhui and Shandong provinces as the research object and obtain 68 questionnaires totally including 62 valid questionnaires. First of all,collecting and sorting the data and analyzing "capable people leading" cooperatives’ basic condition, governance mechanism and performance status in research area on the method of descriptive statistics, we get the defects in the governance mechanism.Then, performance comprehensive value is made through the factor analysis of economic performance, social performance and the ecological performance. Finally,this article chooses 17 second indexes including the cultural level of director to represent directors and board of directors, equity system, exit system, supervision system, decision-making system, profit distribution system and external factors, with the addition of comprehensive value of the performance, analyzing the influence of governance mechanism to the performance with the method of multiple regressions.The empirical results show that some governance mechanism indexes influencing theperformance more significantly including the proportion of director’s remuneration of the cooperative surplus, differences in the cooperative shares of different members,the top 10 shareholders holding, the number of financial information disclosure and whether members(representative) assembly and the council make decisions by “one person, one vote”.There are main conclusions of this paper.(1) It is necessary to perfect the governance mechanism further because there are existing problems of governance mechanism in the "capable people leading" cooperatives;(2)governance mechanism overall a significant impact on performance in "capable people leading" cooperatives;(3) Internal governance mechanism together with the external factors impact on performance in "capable people leading" cooperatives. In view of the research conclusion, this article put forward the proposal from the internal construction of farmers’ professional cooperatives and the government’s guidance on farmers’ professional cooperatives. First of all, "capable people leading" cooperatives should pay more attention to the "capable people" and improve the incentives to the director. Next, "capable people leading" cooperatives should strive to improve the supervision system and the decision-making system. Finally, the government should increase the support of farmers’ professional cooperatives in the policy, capital,technology and talent and so on, especially the capital support.