A Case Study On The Effectiveness Of Financial Governance Of The New Third Board Listed V Corporation

This paper studied the financial governance of V corporation listed in the New Third Board in China.A set of evaluation criteria was developed to analyze the effectiveness of the financial governance of the listed companies.Ultimately,recommendations to improve the effectiveness of the financial governance of V corporate has been made for other similar companies to reference.Considering the financial governance environment and characteristics within the New Three Board in China,based on the studies of corporate governance evaluation standards both at home and abroad.The evaluation criteria of financial governance effectiveness include two aspects: first aspect is the evaluation criteria of the effectiveness of financial internal control,and another one is the evaluation criteria for the effectiveness of the supervision of financial activities.The former is divided into the compliance control standards of material project decision-making,material procurement,material investment,external guarantee and other major financial activities,plus financial risk management effectiveness standards.The latter is divided into the effectiveness of the supervision of financial activities of supervisors,external auditing agencies and independent directors.Based on those evaluation criteria above,this paper analyzed the effectiveness of financial governance of V Company using case analysis and qualitative analysis.Analysis results indicate that the financial governance structure is not effective and the financial internal control system is flawed.Also,the company does not adopt the system of independent directors.Besides,poor supervision of board of supervisors and external audit institutions exists.Thus,the case study also validates the practicality and effectiveness of the evaluation criteria.Eventually,to remedy these shortcomings mentioned above,some recommendations has been made and divided into two major aspects.The former includes optimizing the ownership structure,improving the corporate governance structure,promote the financial activity control system,ameliorate the financial risk management system and strengthening the company's financial information communication.The later contains adoption of strict provisions to ensure supervisors to fulfill their duties and establishment of the system of independent directors plus the mechanism of collaboration between internal and external financial supervisors.