중국기업 지배구조의 문제점과 개선방안

This paper is purposed to investigate the current practices and problems in China's corporate governance and suggest some solutions to enhance its quality. The first key problem in China's corporate governance is the highly concentrated ownership structure in Chinese companies. The government needs to further diversify the ownership structure of Chinese firms by privatizing the SOEs, completing the transformation of non-tradable shares into tradable shares, and fostering the development of institutional investors. The second problem in China's corporate governance is the lack of managerial incentive scheme. In order to align the interest of the top managers with that of shareholders, Chinese companies need to adopt the new managerial compensation scheme associated with corporate performance such as stock options and performance shares. The third problem in China's corporate governance is the weak independence of the board of directors. Most of company officials are nominated by government departments instead of the board of directors. Government influences still plays a key role in the decision making processes of company affairs. The government needs to give more autonomy to the board of directors so that the board's directors can effectively perform the duty of monitoring and checking the management. The fourth problem in China's corporate governance is the poor legal infrastructure. In the light of the international standards, China's government needs to strengthen legal liabilities of company executives and enforcement of laws. The government also needs to improve disclosure and supervision of insider transactions in order to prevent the "tunneling" by insiders. The fifth problem in China's corporate governance is the lack of shareholder activism. In order to effectively perform the role of monitoring corporate management, institutional investors in China need to improve their own corporate governance and strengthen their capacity for internal controls, risk management systems, and management information systems. In order to promote shareholder activism, the government needs to impose on all institutional investors the fiduciary duty concerning the exercise of voting rights and prepare an incentive system for fund managers in institutional investors. The last problem in China's corporate governance is the inactive market for corporate control. To develop the market for corporate control in China, its preconditions such as ownership diversification and efficient capital markets must be satisfied first of all. Furthermore, the China's government needs to simplify the procedures for M&A approval and permit financing for takeovers including issuance of junk bonds and provision of bridge loans.