| Major owners have continued to cut their holdings since China began the share structure reform in 2005,and the situation of high equity concentration in listed companies has improved.The "Bao Wan dispute" in 2015 marked that my country has entered the era of decentralized equity.Shareholders cannot form an absolute advantage in equity,and more and more other ways to increase control.The board of directors is the most important entity in corporate governance,and because there are no necessary legislative requirements for naming directors in our nation,over-appointment of directors by shareholders has become a typical occurrence.On the basis of the relevant theories of corporate governance,this paper chooses two typical cases of over-appointed directors by the controlling shareholder of Furen Pharmaceuticals and China Unicom’s non-controlling shareholders.First of all,this paper studies the motivation of the power restructuring of the board of directors of the case company,and analyzes the over-appointed directors of Furen Pharmaceuticals’ controlling shareholder and China Unicom’s non-controlling shareholders from the perspectives of the company’s development process,internal power structure changes and dependence on external resources,to investigate the demands of all shareholders to improve their control,as well as the possibility of realizing the power restructuring of the board of directors behind this phenomena.Secondly,this article judges the governance effect brought by different types of shareholders over-appointed directors through the short-term market reaction and long-term financial performance after the re-election of the board of directors of the two cases,it is found that the over-appointment of directors by the controlling shareholder of Furen Pharmaceuticals has not attracted obvious market attention in the short term,during the tenure of the board of directors,the performance of the company has been greatly reduced;while the over-appointment of directors by China Unicom’s non-controlling shareholders has significantly enhanced market confidence,and the new board of directors has greatly improved the company’s performance during its tenure.Then,through the analysis of the changes in the behavior of the board of directors after the re-election,it has been discovered that changes in the board of directors’ structure have resulted in variances in the board of directors’ conduct,which has an further impact on the company’s performance.The specific path is reflected in: the excess directors of the controlling shareholders of Furen Pharmaceutical caused the imbalance of the board structure,which led to the company’s strategic decision-making mistakes by encroaching on the management decision-making power,"two functions in one" made the supervision of the management ineffective,overriding the internal control mechanism under the conceal of board of directors so as to engage in tunneling behavior,these behaviors ultimately had an adverse impact on enterprise performance;Non-controlling shareholders in China Unicom have over-appointed the board of directors to create effective checks and balances inside the board of directors,as well as actively participating in significant corporate concerns,strengthening supervision and incentives for management,optimizing internal control,and promoting the integration of heterogeneous resources and other behaviors have a favorable impact on corporate performance.Finally,based on the experience of case companies,the paper expounds enlightenment on how to use the new form of over-appointment of directors to optimize the board architecture,thereby strengthening board governance and improving corporate performance. |
