One, four main corporate governance theories Corporate governance theory is the theoretical basis for building corporate governance structure and solving corporate governance problems. The so-called corporate governance problem refers to a series of problems caused by the failure of internal incentive, restraint and checks and balances mechanism, the ineffectiveness of external governance market, or the lack of perfect corporate governance laws and regulations, such as insiders infringing on the interests of shareholders, large shareholders infringing on the interests of minority shareholders, and the company's business objectives deviating from the goal of maximizing shareholder value. There are four main theoretical explanations for the causes of corporate governance problems, among which the principal-agent theory is widely accepted and plays a leading role in the formation of corporate governance mechanism in practice. The other three theories about corporate governance are classical Butler theory, modern Butler theory and stakeholder theory. In recent years, the stakeholder theory has also been recognized to some extent in Britain and the United States, and has become an important supplement to the principal-agent theory. (I) Principal-agent theory According to the principal-agent theory, corporate governance problems are accompanied by principal-agent problems. Due to the increasing diversification of modern joint-stock companies' equity and the increasingly complex and specialized management, the owners of the company, shareholders, usually no longer directly act as the operators of the company, but as principals, entrusting the management rights of the company to professional managers, who, as agents, accept the entrustment of shareholders and operate the enterprise on their behalf, thus resulting in the principal-agent relationship between shareholders and managers. Due to the principal-agent relationship between the company owner and the operator, the interests of the two are inconsistent, resulting in agency costs, which may eventually lead to an increase in the company's operating costs. The conditions for the existence of the principal-agent problem and agency cost include: (1) the interests of the principal and the agent are inconsistent: because the interests of the agent may be inconsistent with the interests of the company, the agent's pursuit of maximizing his own interests may harm the overall interests of the company; (2) Information asymmetry: The client can't fully grasp all the information owned by the agent, so the client must spend supervision costs, such as establishing institutions and hiring a third party to supervise the agent. However, sometimes it is difficult for customers to evaluate the skills and efforts of agents; (3) Uncertainty: Because the performance of the company depends on the ability and efforts of the agent, and it is also influenced by many other exogenous and unpredictable events, it is usually difficult for the client to reward and punish the agent only based on the performance of the company, which is unfair to the agent. From the above-mentioned conditions of principal-agent problem and agency cost, we can find that the existence of principal-agent relationship does not necessarily lead to principal-agent problem. If the shareholders as agents can grasp complete information and predict all possible future situations, they may make a complete contract, specifying all the responsibilities, rights and obligations of agents in detail, and making corresponding provisions on all possible consequences and solutions of all possible future situations in the contract, so as to completely eliminate them. For example, a complete agency contract will include under what circumstances the manager will be replaced, under what circumstances the company will sell or buy assets, under what circumstances the company will recruit or dismiss workers, and so on. If there is such a complete principal-agent contract, even if there is a principal-agent relationship, there will be no principal-agent problem, and it is difficult for us to find the role that corporate governance should play in it. Only when the initial contract is incomplete, so it is necessary to make decisions in the future for some situations not stipulated in the initial contract, the corporate governance structure will play a role. In fact, the corporate governance structure is the decision-making mechanism in this case. It is conceivable that if the contract is complete and everything is agreed in advance, there will be no "legacy" matters to be decided, and the corporate governance mechanism will not be important. When the principal-agent relationship and incomplete contract exist at the same time, the corporate governance mechanism will play a role. The governance structure can be regarded as a decision-making mechanism for situations that are not clearly stipulated in the initial contract. More accurately, the governance structure is the distribution of residual control rights of company capital except human capital. (II) Classical Butler Theory The formation of classical Butler theory is based on the theory of neoclassical economics. In neoclassical economics, the enterprise is a completely rational economic man, the market is a completely competitive market, information and capital can flow freely, and the enterprise is in a completely competitive environment. Under the basic assumption of complete information in neoclassical economics, although there is a principal-agent relationship between the owner and the operator, it is impossible for the operator to manage the enterprise against the will of the client, so the agency problem does not exist, and there is a selfless trust relationship between the owner and the operator, so the model of corporate governance is no longer important. In this sense, corporate governance is characterized by the supremacy of shareholders' sovereignty, and the relationship among shareholders, board of directors and managers based on trust makes operators act according to the principle of maximizing shareholders' interests. Because the market faced by modern companies is neither a perfect competitive market nor a complete information market, the classic Butler theory obviously cannot explain the corporate governance behavior under the conditions of modern market economy. As the initial bud of corporate governance theory, the classic Butler theory is basically meaningless for studying modern corporate governance. (3) Modern Butler Theory The assumption of complete information in classical Butler theory is obviously not in line with reality. Because incomplete information exists objectively, its wrong premise assumption will inevitably lead to a huge gap between the inferred results and reality. Although the agency theory helps to partially explain the problems caused by the separation of ownership and management rights, the research of modern psychology and organizational behavior shows that some assumptions of the agency theory, especially those about the inherent opportunism and lazy behavior of operators, are inappropriate, and people may become self-interested agents or selfless good housekeepers. From a psychological point of view, the differences between people in reality are enormous. There is an interactive control relationship between everyone and their community or environment, and it changes with the change of this interactive relationship. Therefore, people sometimes compete and sometimes cooperate, usually both. Many empirical analysis results are completely contrary to the agency theory. On this basis, 200 1, the Australian School of Business Administration of the University of New South Wales, Australia, put forward a theory completely different from the agency theory-modern butler theory. It is believed that achievement, honor and responsibility are more important factors to motivate company managers than material benefits. Out of the pursuit of self-dignity, belief and internal job satisfaction, operators will work as hard as good housekeepers and become good "housekeepers" of the company. In a paper published in 2004, it was pointed out that the supporters of agency theory preconceived that an independent board of directors, mainly independent external directors, would definitely be better according to the assumption that human nature is evil, so they strongly advocated the independence of the board of directors. From the perspective of system design, the board of directors mainly composed of independent external directors is an inefficient organizational form, because it does not conform to the basic principle of organizational design, that is, the decision-making of the person with the most comprehensive information is the most effective. In fact, they think it is doubtful whether the board of directors is necessary in general. Some empirical analysis supports this theory. Many studies have found that there is no significant positive correlation between the independence of the board of directors and corporate performance. On the contrary, the operating performance of some companies with executive directors is higher than that of companies with strong board independence. Modern Butler theory, as one of the theories of corporate governance, is supported by certain theoretical and empirical analysis. However, in today's era of advocating corporate democracy and leading institutional investors, this theory has been submerged in agency theory and few people pay attention to it. (IV) Stakeholder theory The formation of corporate governance mechanism in Britain and America is basically based on the classical Butler theory. Later, the principal-agent theory gradually became the theoretical basis for building corporate governance. The classic Butler theory and principal-agent theory both aim at maximizing shareholder value. However, this idea is increasingly criticized because it excludes the interests of the company's wider stakeholders. Modern enterprise theory holds that, first of all, modern companies are a combination of national dependence. Under the normal operation of the company, the ownership of the company belongs to the shareholders. However, once the company enters the stage of loss and bankruptcy, the ownership of the company belongs to the creditors of the company, and the creditors decide whether to reorganize or liquidate the company. Furthermore, when the company's assets are insufficient to pay employees' wages, employees become the actual controllers of the company and have the right to make decisions on the disposal of the company's assets. Therefore, we should not only regard the company as the subject owned by shareholders, but also let creditors and employees participate in the governance of the company. Secondly, from the perspective of value formation, the value formation of a company is contributed by many factors. From the perspective of investment, the maximization of company value depends on the stable relationship between the company and suppliers and other partners; From the demand point of view, consumers and distributors are also important factors in the formation of company value, and the company needs to form a trustworthy relationship with consumers and distributors in order to maintain the market share and competitiveness of products. Therefore, in order to maximize the value of the company, suppliers, distributors and consumers are inevitably required to participate in the corporate governance framework. Third, under the modern market conditions, the company is a responsible subject, and it must also bear social responsibilities to a certain extent. The value of the company is not only reflected in the interests of shareholders, but also in the social value of the company. Due to the further enrichment of the concept of company, the stakeholder theory that requires stakeholders to participate in corporate governance came into being. According to the stakeholder theory, because the company is a system composed of different factor providers, the company's goal should be to create wealth and increase value for all factor providers, not just to maximize the interests of shareholders. In order to achieve this goal, the company's board of directors should be encouraged to be more representative, and the board of directors should include company employees, major suppliers and customers, loan banks and community representatives to ensure their right to speak on the board of directors. In recent years, the stakeholder theory has been recognized to some extent in Britain and America. For example, the American Law Association clearly points out in its Principles of Corporate Governance that modern companies are interdependent with many interest groups, such as employees, customers and suppliers. The Principles of Corporate Governance also specifically regards stakeholders as an important part of it, clearly pointing out that while pursuing the maximization of shareholders' interests, companies should pay attention to and consider that the interests of stakeholders should not be harmed. At present, although the position and role of relevant stakeholders in corporate governance have not yet formed a complete theoretical system, many practices have made useful attempts in this regard, such as implementing employee stock ownership plan, giving full play to the role of institutional investors and creditors, and so on. Second, the division of several main corporate governance models. The main sign of corporate governance mode is the form of ownership and control. Traditional corporate governance theory divides the main modes of corporate governance into market supervision mode in Britain and America and shareholder supervision mode in Germany and Japan. In recent years, after studying the corporate governance in East Asia, the former Soviet Union and Eastern European countries, some corporate governance experts and scholars have summed up two corporate governance models: "family control" and "insider control". In fact, the family control mode in East Asian countries is similar to that in Germany and Japan. Both of them are characterized by direct monitoring by major shareholders, but in Germany and Japan, major shareholders are mainly banks or consortia, while in East Asian countries, major shareholders are mainly controlling families. The emergence of "insider control" corporate governance model in the former Soviet Union and Eastern European countries is due to the fact that the national economy is in a special stage of transition from planned economy to market economy, the development of market mechanism is lagging behind, and corporate governance laws and regulations are imperfect. (1) anglo-American market supervision mode adopts anglo-American legal system countries, such as the United States, Britain, Australia and other countries. The corporate governance model is mainly based on the external monitoring of the company, which is characterized by the high dispersion of the company's equity. Due to the problem of "hitchhiking", shareholders have little influence on the company's operation and management. The punishment for poor management of operators is usually shareholder selling shares (voting with their feet) and subsequent hostile takeover. In the United States, government regulations prohibit banks, mutual funds, pension funds and insurance companies from holding controlling shares in companies on the grounds of maintaining asset diversification. Therefore, in this mode, the interests of shareholders are largely under the pressure of product market, company control market and manager talent market, and are protected by laws and regulations such as information disclosure, insider trading control and minority shareholders' rights protection. Through these forces from outside the company, the management is urged to abide by the law and work hard to maximize the interests of shareholders. In order to illustrate the operating principle of corporate governance mechanism in Britain and America, let's first look at how it works. Legally speaking, the board of directors is elected by shareholders. As the trustee of shareholders, the board of directors bears the fiduciary responsibility and represents the interests of shareholders. The board of directors elects, appoints and dismisses senior management personnel of the company, examines and approves major investment and financing decisions, and supervises the senior management personnel of the company to ensure that their actions are in line with the interests of shareholders. However, in practice, people question whether directors can effectively safeguard the interests of shareholders. New directors are nominated by current directors, who usually include the company's senior management. Candidates for new directors are almost always approved at regular shareholders' meetings. Theoretically, dissatisfied shareholders can put forward their own candidates, launch the "proxy war" and try to get their own candidates into the board of directors, but this is usually expensive and difficult to succeed. Therefore, in practice, they seldom do so. Instead, I chose to vote with my feet and express my dissatisfaction by selling shares. However, selling stocks can send a very strong message. If a sufficient number of shareholders sell their shares, the company's share price will fall, which will damage the reputation of senior managers, shake their position and affect their income. On the one hand, the board of directors may consider re-hiring managers, because the existence of an active manager talent market makes it almost always possible for the board to find competent managers. On the other hand, because a large part of the income of senior managers comes from bonuses and stock options, bonuses are usually linked to the company's net income, while stock options are linked to the stock price. Therefore, if the stock price rises, stock options will bring great benefits to managers, while if the stock price falls, the options will be worthless. This urges managers to maximize the company's income and share price, so it is in the interest of shareholders. For managers and directors who do not act in accordance with the interests of shareholders, the threat of hostile takeover always exists. If the company's share price falls below its due value due to mismanagement and decision-making mistakes, other companies and investor groups may gain control of the company by buying its shares, and then replace them with responsible managers and directors to realize the potential value of the company. Therefore, in countries such as Britain and the United States, due to the lack of supervision by company shareholders and the separation of ownership and control, entrustment came into being! The agency problem has been controlled and alleviated in the following four ways: directors and senior executives have legal responsibilities and must report to shareholders according to the research of the comprehensive research institute of Shenzhen Stock Exchange, the owner of the company! Act in the interest of; (1) Design a reasonable salary incentive mechanism for senior managers, and link their income with the company's performance and stock price; (2) the pressure of product market and manager talent market (incompetence will be replaced); (3) The pressure of the company's control market (the company is acquired by other investors). Since then, in view of some problems exposed by the mode of totally relying on external supervision, Britain and the United States and other countries have begun to carry out a series of reforms on their corporate governance models, including formulating various principles, norms and articles of association, encouraging institutional investors to participate in corporate governance, requiring companies to enhance the independence of the board of directors and introducing a certain number of independent directors into the board of directors. It is hoped that these measures will strengthen the company's internal monitoring and make up for the problems caused by insufficient external monitoring. (2) The internal monitoring modes in Germany and Japan are different from those in Britain and America, which mainly rely on external forces to monitor the management. The corporate governance models in Germany and Japan mainly focus on the internal monitoring of the company's major shareholders, while the external market, especially the corporate control market, has little monitoring effect, and the laws and regulations on information disclosure, insider trading control and minority shareholders' rights protection are not as perfect as those in Britain and the United States. The equity structure of German and Japanese companies is characterized by relatively concentrated equity. The company has major investors who have significant interests or shares, and the management is strictly supervised by these major investors (banks, non-bank financial institutions or other companies). The concentration of equity makes investors have both motivation and ability to supervise and control the management. In Germany, the three largest banks own a large number of shares in listed companies, and they also vote on behalf of other shareholders. In Japan, banks are usually the largest shareholders of publicly listed companies, and the proportion of cross-shareholding among companies is also high. There are obvious differences between the corporate control mechanism of the Anglo-American model and the German-Japanese model. Generally speaking, in order to ensure that the company does not deviate too far from the behavior of maximizing value, there are many mechanisms that can be used, including direct and indirect control measures. The famous economist Stiglitz emphasized that the most important of these mechanisms is the concentration of corporate interests. If the equity is concentrated in the hands of a few investors, then they have enough motivation to obtain information and supervise the management of the company. The large shareholding ratio also enables them to control the management. If it is impossible to concentrate ownership, indirect supervision means must be used, including active enterprise acquisition market, well-run and competitive manager talent market, and concentration of creditor's rights (in this case, the supervision function is completed by creditors). In the Anglo-American model, indirect means of corporate control are often used, including hostile takeover, leveraged buyout, "voting with feet", agency war, incentive contract based on corporate performance, legal prohibition of internal transactions and related transactions, and legal protection of minority shareholders' rights and interests. The German-Japanese model emphasizes direct control, the board of directors has greater power and role, and the major shareholders have strong direct supervision. Major shareholders can be financial institutions, other non-financial companies or individuals. Malicious takeovers are almost non-existent in Germany and Japan. Germany, for example, has only had four successful hostile takeovers since World War II. The practice of replacing ineffective management with acquisition is not common in Japan. In contrast, in the United States, the largest companies in the United States listed by Fortune magazine have been acquired maliciously. Because German and Japanese enterprises come from behind, they pose a great threat to British and American enterprises in the global market, which causes corporate governance experts to reflect on the external monitoring model of Britain and the United States. Some experts believe that the improvement of the competitiveness of German and Japanese enterprises benefits from its effective internal control mode. Therefore, during this period, the corporate governance model based on internal control was highly respected. However, with the continuous exposure of a series of related transactions and insider trading that harm shareholders' interests, people gradually realize that the corporate governance model based solely on a certain monitoring mode is not the best, and only the corporate governance mechanism established by combining the advantages of the two models can protect shareholders' rights and interests most effectively and maximize the company's value. (3) Family control mode in East Asia. In most East and Southeast Asian countries and regions except China and Japan, such as Korea, Hongkong, Taiwan Province Province, Thailand, Singapore, Malaysia, Philippines, Indonesia, etc. , the company's equity is generally concentrated in the hands of the entrepreneur family, the controlling family usually participates in the company's management and investment decisions, and the main senior management positions of the company are mainly held by the members of the controlling family. Therefore, major shareholders and managers are integrated. This corporate governance model makes the interests of major shareholders and managers consistent, and partially eliminates the principal-agent problem caused by the separation of ownership and management rights in European and American companies. However, the common problem of this corporate governance model is that the main controlling shareholder and manager infringe on the interests of other shareholders of the company. Therefore, the core of corporate governance has changed from controlling the conflict of interest between management and shareholders to controlling the conflict of interest between major shareholders and management and the majority of small and medium shareholders. (IV) Insider control mode Insider control refers to the phenomenon that the company lacks both the internal control of shareholders and the monitoring of the company's external governance market and related laws and regulations, which leads the company's managers and employees to become the actual controllers of the company. It mainly exists in countries with economic transition such as the former Soviet Union and Eastern Europe, and also exists in some listed companies that were restructured from former state-owned enterprises in China. The former Soviet Union, Eastern Europe and other countries with economies in transition have some common characteristics. For example, a large number of large state-owned enterprises need to be reorganized, and at the same time, they have inherited the original chaotic legal department. In the process of transition from planned economy to market economy, the original state-owned enterprises generally have the phenomenon of owner vacancy, but the development of market mechanism is still not perfect, the effective market of company control rights and managers' talents can not play an effective role, the legal system is not perfect, and the execution is weak, which leads managers to take advantage of the vacuum left by the disintegration of planned economy to exercise strong control over enterprises and become the actual owners of enterprises to some extent. Read the full text () | Reply (0) | Reference Notice () | Edit