Chapter 170 On August 23, the separation of the two powers is inevitable

I think that in an ideal corporate governance structure, more than 50% of the members of the board of directors and management should not overlap, which not only ensures the unity of the board of directors and management, but also ensures the implementation between the board of directors and management.The transfer of management was finally completed, which will become the historical legacy of New Oriental. It will prevent New Oriental from being chaotic when facing the transfer of management, rights and interests in the future, and it will not be like many Chinese companies. The traditional old path of corporate collapse due to turmoil at the top.

At the end of 2008, the financial crisis that originated in the United States swept the world in a very short period of time, and spread from the financial sector to the real economy. Unfortunately, many well-known companies were "killed". Professor Li Wei'an, Dean of the Business School of Nankai University, is an expert in the field of corporate governance. In an interview with the media, he once cited the example of Zurich Financial Services Group (hereinafter referred to as Zurich Insurance), a large financial institution.The performance of Zurich Insurance in this financial crisis has many beneficial enlightenments.Zurich Insurance's board of directors, all members are outside directors, including the chairman.The biggest feature of this organizational structure is that the members of the board of directors are completely and thoroughly separated from the management, without any form of overlap, and the separation of decision-making, supervision and execution is truly achieved.Board members will fully communicate with management members before making decisions, but will make independent decisions afterwards.During a decision-making process, the board of directors of Zurich Insurance believed that financial derivatives were too risky and decided not to participate in the relevant business, thus avoiding a disaster.It can be seen that independence and a standardized operating mechanism are the key to the reform of the board of directors.

"Rules, compliance, and accountability are the six-character key to corporate governance," Professor Li Wei'an believes, "The board of directors should grasp the direction and speed of development in the corporate governance structure, and control overall and systemic risks. Why do shareholders sue the board of directors if something goes wrong? ? It is because it failed to grasp the bottom line of such risks, so that the company went bankrupt or suffered heavy losses.” Before listing, New Oriental's board of directors, the shareholders' meeting above the president, and the board of supervisors were mainly responsible for the dividend distribution after the decision-making performance was achieved and the supervision of the implementation of the annual budget.At that time, the members of New Oriental's board of directors were basically members of the management team, which was not subdivided and standardized enough.After listing, New Oriental's board of directors and management have achieved a relatively reasonable division and division of labor.China's private enterprises are passing a major hurdle in corporate governance. It is important to realize the separation of ownership and management, board of directors and management, and realize the switch between the two different identities of supervision and supervision.Clear ownership, safety and integrity, risk control, and focus on performance are the principles of "separation of two powers". Under the guidance of this principle, shareholders and managers are actively guided and encouraged to share and share interests.Wei Xin, chairman of Founder Group of Peking University, once raised an interesting slogan internally - less sense of ownership and more spirit of migrant workers.Such a formulation is intriguing and reminds professional managers to clearly understand their own roles and positioning, and to be loyal to the enterprise with the spirit of migrant workers.

The "separation of the two powers" may show similar inefficiencies in the early stages of a company's start-up, but in the long run, the "separation of the two powers" is inevitable for sustainable development.