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Thus, in American what needs to be supervised is the managerial staff, neither the some respective shareholders nor the board of the directors, since the board of the directors is coherence. Briefly said, the mutual restriction is between the shareholders and the managerial staff.
The Structure of Shares in China’s Public Corporate Governance.
Conversely, in China, it is the obvious character in public held corporations’ governance—the concentration of the shares—that result in the elected directors only represent the large holders even only the one largest holders but not the interest of all the shareholders.
The statistic below can prove the fact that the publicly held corporations in China have the characteristic above —the concentration of the shares. By the end of May 10th, 2001, there are 1,206 public held corporations in Shenzhen and Shanghai Security Exchanges. Among these corporations, 15 percent of them are the firms over 66 percent of whose shares are hold by the largest shareholders, 42 percent of are the firms over 50 percent of whose shares are held by the largest shareholders, 62 percent are the firms over 37.5percent of whose shares are held by the largest shareholders, 74 percent of them are the firms over 30 percent of whose shares are held by the largest shareholders.（11）Those largest shareholders include not only the state holders but also the private holders, for instance, Family Zhu hold 74.8 percent shares of the TaiTa Enterprise Group. （12）
The statistic above shows that the shares owned by the largest shareholders are so large that cause 70 percent of all the publicly held corporations are controlled by the controlling shareholders. The controlling holders can control the assemble shareholders meeting to control the election of the board of the directors. This kind of control will make it possible for the controlling shareholders to make decisions at the price of the interest of the other stakeholders in the way seeming legally. So in China, what need to supervise also are the large shareholders. The restriction is also between the large shareholders and the small shareholders and the employees as that in Germany, which decide the model of Chinese public held corporate governance system is Tow-tier System including supervisory board which is composed of the representatives of shareholders and some employees..
SECTIONⅡ The Problem in Chinese Public Held Corporate and the Solutions
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