What are the problems in corporate governance?

At present, China's economy is in a period of rapid development, and small and medium-sized enterprises are particularly active, but entrepreneurs often focus on management and production and generally don't care about corporate governance structure. The reason is how to convene a general meeting of shareholders, the division of powers between the board of directors and the board of supervisors and other professional issues. Entrepreneurs in China believe that these things need to be considered when the enterprise is established, and these things often have their own templates written into the articles of association, and the articles of association have not been paid attention to by the business owners, making the articles of association an armchair strategist and unable to play its due role. In corporate governance, there are three groups serving entrepreneurs. One is a management consulting company, which optimizes the corporate governance structure from the management aspect; One is the financial company, which measures the corporate governance structure from the financial point of view; One is a law firm, which prevents corporate governance risks from the legal aspect. Among the above three institutions, the finance company is its own extra business and does not belong to the main item. In reality, there are not many companies that use financial companies to engage in corporate governance projects. In society, management consulting companies and law firms are mainly engaged in corporate governance projects. The two organizations have different emphases. This management consulting company is trying to find ways to optimize corporate governance structure, increase incentives and improve economic efficiency. Law firms examine and formulate corporate governance structure from the legal bottom line, which is a basic level. The lawyer's job is to ensure that there are no problems in the company's operation, to legalize the relationship between shareholders, shareholders and managers, to avoid the company's deadlock and to prevent the legalization of the company's internal decision-making procedures. The author believes that at present, China's small and medium-sized enterprises should first ensure the basic legal issues of the company, and then talk about further development. That is to say, first find a law firm to review its articles of association and governance structure, point out the problems, correct them as soon as possible, and then invite management experts to optimize them on this basis to achieve better results. First, the shareholders' meeting is basically an armchair strategist. China's "Company Law" stipulates that the shareholders' meeting is the highest authority of the company and has the final decision on all major issues of the company. However, judging from the current actual situation, the actual power of shareholders' meetings of many companies is very limited, and some even exist in name only. (1) The main manifestations are: the authority is restricted. Some articles of association violate the relevant provisions of the Company Law and restrict the power of the shareholders' meeting. The power of the shareholders' meeting has been greatly weakened, and even it is in an empty position. (2) The operation mechanism is not standardized. Some listed companies impose strict restrictions on the qualifications of shareholders attending the shareholders' meeting, stipulating that only those who hold more shares are eligible to attend the shareholders' meeting, or that only the shareholders' representative meeting is held, which virtually deprives many shareholders of their legitimate rights and interests. (3) The exercise of authority becomes difficult. If some joint-stock companies deliberately fail to hold regular shareholders' meetings according to their articles of association; Other companies do everything possible to prevent shareholders from attending the meeting to avoid the effective supervision of the shareholders' meeting. Second, the board of directors is "not sensible". At present, there are still many defects in the role of the board of directors as the permanent decision-making body of the company, which does not meet the requirements of the standardized corporate governance structure for the board of directors. The phenomenon of "the board of directors is not sensible" is mainly manifested in: (1) the discussion of the board of directors is a mere formality. Some major issues within the functions of the board of directors have not been discussed by the board of directors. Even some boards often do "work" before the meeting, exchange opinions with a few people, and even seek a unified opinion before the meeting, making the board meeting a mere formality. (2) The election, appointment and removal mechanism of the board of directors is not standardized. The composition of the board of directors is not based on the ability of shareholders to seek benefits and the size of capital contribution, but on representativeness, qualification and status. The chairmen and even general managers of some state-owned companies are directly appointed, not elected by the shareholders' meeting. (3) The director's role consciousness has not changed. At present, many directors have too strong sense of officials and too weak sense of entrepreneurs. They are not shareholders, but superiors, official managers, not entrepreneurial decision makers. (D) Directors' knowledge literacy needs to be improved. Many directors know little about the operating mechanism of the company, are at a loss about the market economy, and lack the knowledge and experience to gain insight into the market and engage in company decision-making and management, so it is difficult to perform the duties of directors correctly and effectively. 3. Independent directors are "not independent". The particularity of independent directors lies in their independence. Without independence, they lose the value of existence. Therefore, we must do everything possible to ensure the independence of independent directors. (A) the regulatory authorities and companies have different ideas. The main purpose of introducing the independent director system is to ensure the healthy development of the company, which is the same goal pursued by the regulatory authorities and the company itself. But the reality is that China Securities Regulatory Commission is pushing the independent director system, but the company itself is not active or even flexible, thinking that the establishment of independent directors has bound the company's hands and feet. (2) The positions of large and small shareholders are inconsistent. Most companies are controlled by major shareholders. Due to the influence of traditional non-market economy, major shareholders often regard the company as their own branches, which will inevitably ignore or even infringe on the interests of other shareholders, especially small and medium shareholders. The establishment of independent directors is mainly to protect the interests of minority shareholders. Because of the different interests of representatives, contradictions and conflicts will inevitably arise between major shareholders and independent directors. Therefore, by virtue of its dominant position, major shareholders should either exclude independent directors as much as possible to limit their role, or recommend and support independent directors who are friendly to themselves so as not to oppose or support their own views and interests. Fourth, the board of supervisors "does not supervise". The supervision mechanism of some companies is not perfect, and the board of supervisors exists in name only, which has not fully played its supervisory role. This is mainly manifested in: (1) the supervision institution is not perfect. If some companies don't have a board of supervisors, even if they do, they just decorate the facade of the company. In other companies, the composition of the board of supervisors does not meet the statutory requirements, and there are no employee representatives, only representatives of major shareholders. (2) Lack of independence and authority. Due to the limited supervision authority of the board of supervisors, it is not enough to effectively supervise the board of directors and managers. The company law stipulates that the board of directors and the board of supervisors are equally restricted, but the actual situation is that the board of supervisors is often lower than the board of directors, and the board of supervisors is often helpless about the behavior of the board of directors and managers. Fifth, the relationship between old and new institutions is not smooth. The "new three meetings", that is, the shareholders' meeting, the board of directors and the board of supervisors, are the main framework of the corporate governance structure stipulated in the Company Law, and the "new three meetings" with clear functions and mutual checks and balances are the concrete embodiment of the basic principles and advantages of the modern corporate system. The "three associations", that is, workers' congresses, party committees and trade unions, are one of the important principles and characteristics of China's traditional socialist enterprise system, and also the extension and performance of China's political system in the grass-roots units of the national economy. "New Three Meetings" is an institutional arrangement to ensure the company's operating efficiency and maximize the interests of investors. The "old three associations" are the product of social and political groups, reflecting and representing the interests of the party and workers.