Research On The Governance Effect Of Dual Ownership Structure

The development of enterprises needs financial support,and these developing enterprises generally choose to use equity financing to raise funds.In the equity structure of one share and one right,equity financing will lead to the gradual reduction of the founder's control.Before,China only allowed enterprises to adopt one share and one right system.However,with the improvement of corporate governance level,in order to meet the needs of economic development,China's capital market began to relax the restrictions on the dual equity structure system.In 2018,the Hong Kong Stock Exchange amended the listing rules to allow companies with "the same shares but different rights" to list in Hong Kong;In April 2019,China's Shanghai Stock Exchange issued the administrative measures for the registration of initial public offerings of science and technology innovation board(for Trial Implementation),which designed the company's shares into two categories: Class AB and class B.each class B common share has one voting right,class A shares have multiple voting rights,and each class a share has 10 voting rights,Achieve the purpose of controlling the company.In this context,the listing of Xiaomi in Hong Kong in 2018 has aroused extensive attention and discussion.This paper chooses Xiaomi company as the research object to explore the governance effect of dual ownership structure.This paper first compares the changes of voting rights before and after the adoption of dual ownership structure in Xiaomi company,and then analyzes the reasons for the adoption of dual ownership structure in Xiaomi company: the founder avoids losing control,resists external hostile takeover,takes advantage of human capital,improves decision-making efficiency and ensures the stability and long-term development of the company;Secondly,it analyzes the governance effect of dual ownership structure from two aspects of governance structure and corporate performance;At the level of governance structure,this paper analyzes the impact of dual ownership structure on the ownership structure,board governance and management governance of Xiaomi company.At the level of corporate performance,this paper analyzes the changes of debt paying ability,profitability,operation ability and innovation ability of Xiaomi company.Finally,the paper makes a conclusion that the adoption of dual ownership structure is conducive to the long-term development of Xiaomi company,And put forward some specific suggestions to better play the advantages of dual ownership structure.