An analysis on corporate governance
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are not representative of the company at all levels of the real commitment of dedication, and do not have the residual claim on the company, such a mechanism obviously can not guarantee that the shareholders of the
monitoring and incentive motivation, and ultimately into the managers of the company’s internal control.
4.3 The lack of external market mechanisms
As China’s non-tradable shares of listed companies are dominated, blocking occurs through control of the stock market. And it may change and weaken the capital market function of optimizing the allocation of resources.
5. The solutions to corporate governance
5.1 The establishment of the board self-evaluation system
Including the realization of the investment decision-making and the rationalization of decision-making process, promote and supervise the operation of enterprises in various sectors of system and organizations so that
these aspects of operational procedures, and transparency, rationalization, and promote the institutionalization of internal control mechanisms, rationalizing and so on. Layer of governance must ensure that the second mechanism
to maximize the objective of the interests of shareholders is a fair system of remuneration.
5.2 The establishment of a sound internal control mechanisms in listed companies
It includes the development of science, supporting the accounting norm system, relevant laws and regulations of China’s current loopholes and inadequacies of modifications to be added. At the same time, the stock market
should intensify the supervision of disclosure of financial information management efforts, in the light of international practice, securities market to the existing governance structure and disclosure of financial
information of listed companies to carry out corresponding reforms in the system.
5.3 Standardize the market order
Fierce market competition will reduce the slack management layer, and may help limit the behavior of low efficiency. Norms and product market competition can judge the results of company performance and managers
using the basic standards of governance. The survival of the fittest of the market mechanism can play a stimulating and spur the role of managers.
6. Conclusion
Corporate governance has gained more and more attention both in theory and practice as a world wide research topic. Because the research of corporate governance is important to sustain development of the
enterprises, to realize the social value of the enterprises, to protect the interests of the stakeholders and even to guarantee the wealth growth of the country. Sound corporate governance is a continuous process to solve
problems and meet the challenge process. Improving corporate governance is a systematic project, it is necessary to the internal governance and external governance of the ways multi-pronged.
References: Mari, K.. 2006. Corporate governance from the perspective of stakeholder, theory and in light of perceptions among Estonian
owners and managers of relations with stakeholders. Ebs Review, 1. Chi-Kun Ho. 2005. Corporate governance and corporate competitiveness: An international analysis. Corporate Governance: An
International Review , 132.
Berle, A. A. Means, G. C.. 1932. The modern corporation and private property. New York: Commerce Clearing House, Inc.. Chan, F.. 2003. Corporate governance for the SME. Lawlink Resource, Winter. Retrieved from: http:www.lawlink.co.nzresources
governance.pdf; Financial Review, July 19, 2001.
Edited by Linda and Mary
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Call for Papers
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This is Journal of Modern Accounting and Auditing, a professional journal sponsored by American Sino-US Association of Entrepreneurs, and published across the United States by David Publishing Company, Chicago, IL,
USA. In China, this journal is regularly issued by China National Publication Import Export Corporation on commission.
Journal of Modern Accounting and Auditing is collected and indexed by the Library of U.S Congress. In
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★ The Journal welcomes both theoretical and empirical contributions, especially theoretical papers that yield
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Internal Control, Corporate Governance, Corporate Performance, Corporate Accountability, Corporate
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Other topics on accounting, auditing and finance.
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