The Discussion On Corporate Governance Under The Dual-Class Share Structure

The financial crisis in 2008 has caused serious consequences to our economy,but through the unremitting efforts of our government,the current economic development situation of our country is good.Recognizing the importance of science,technology and innovation,China has continuously encouraged and supported the people to start businesses,which has led to the development of high-tech industries becoming better and better.As a high-tech enterprise,the founder plays an important role as the movable-type signboard of the enterprise.For this reason,it is very important to ensure the founder's control rights.In order to adapt to the economic development,the ownership structure is also changing.However,at present,only companies are allowed to list and finance in the form of the same shares and rights,which is not conducive to maintaining the founder's control rights.If the control right is diluted,it will easily lead to the decentralization of ownership,which will probably lead to the contention for control right.Conflict of control rights will inevitably lead to the instability of enterprises,which is extremely harmful to the development of enterprises.Capital has become a key factor for enterprises to become bigger and stronger.From the perspective of cost efficiency,founders usually choose the way of listing financing to obtain capital.However,in order to ensure its control and decision-making power,improve the efficiency and performance of enterprise decision-making,consolidate the position of the industry,and prevent the enterprise from being maliciously acquired,it is usually to abandon domestic listing and choose to adopt dual equity structure financing abroad.Even though the dual-class share structure has some advantages,the corporate governance under this structure brings risks to the general investors,creditors,management and supervision.Therefore,it is more necessary to explore the governance problems brought about by this structure.This paper chooses JD as the case study object.On the one hand,because most of the enterprises with the dual-class share structure come from the Internet industry,JD as an Internet enterprise adopts the dual-class share structure,which has been established for a long time and has a large scale.Moreover,it witnesses the development of the domestic Internet industry,so it is more typical.On the other hand,JD is a listed company,whose data sources are real and objective,and easy to obtain,which meets the requirements of the research object in this paper.First at all,this paper adopts the method of literature research,and draws the research theme by collecting related literature of domestic and foreign the dual-class share structure and corporate governance.Then,analyzing the collected literature and extracting the theoretical overview of the dual-class share structure and corporate governance.Next,using the method of case analysis introduces the JD 's profile and equity profile,explores the motivations why JD adopt the dual-class share structure,and the risk that the structure poses to corporate governance.Finally,relevant recommendations and conclusions are proposed for this risk to prevent and restrict.Firstly,this paper uses literature research methods to collect relevant literature on the dual-class share structure and corporate governance at home and abroad,and leads to the research theme.Then the collected literature is analyzed to extract the theoretical overview related to the research object.Then,using case analysis method,this paper introduces the details of JD and equity,and explores the motivation of adopting dual equity structure,as well as the risk of this structure to corporate governance.Finally,some suggestions and conclusions are put forward to prevent and restrict the risk.This article mainly includes six chapters,in turn: introduction,overview of relevant theories,motivation analysis under the dual-class share structure of JD,risk of corporate governance under the dual-class share structure of JD,giving full play to the advantages of the dual-class share structure,and suggestions and conclusions for improving corporate governance.The purpose of the first chapter is to introduce the theme.The second chapter mainly elaborates the related concepts.The third chapter begins with the introduction of JD.It mainly includes company profile,financing results,changes in shareholding and the motivation of adopting the dual-class share structure.Chapter IV mainly clarifies the risks.For example,corporate governance under this structure is likely to bring risks to small and medium investors,management,creditors and supervision mechanism.Chapter 5 puts forward relevant suggestions according to risks.In order to cope with and avoid risks and protect the rights and interests of ordinary investors,the use of super voting rights is prohibited for major transactions.At the same time,the litigation system and enterprise relief system for small and medium-sized investors should be established,which is conducive to reducing investors' investment and speculative risk.In order to improve the stability of management and protect the interests of creditors,we should actively implement equity incentive policy and establish a sound mechanism for the use of funds.In view of the corporate governance problems under the dual-class share structure,it is important to find out the problems and deal with them in time,but it is more important to prevent them from the source,which requires continuous optimization of internal and external supervision mechanism.Chapter 6 is the conclusion.The difference between this paper and other countries is that corporate governance is the focus of research,focusing on problem analysis.Most studies focus on the advantage analysis of the dual-class share structure,but fail to take into account that when the image of the founder is questionable,the stock price is likely to fluctuate sharply.Nor does it take into account that although the book of enterprises is profitable,there are also problems of declining growth rate of revenue capacity,which makes it a question mark whether the enterprise is really profitable,and this paper makes a thorough analysis of these problems.