Precondition:
The recent bond default risk of Vanke and the accusations of misconduct by its management, especially Yu Liang's team, by its partners, have attracted widespread attention in the market, although they have not been confirmed. These incidents are similar to the case of Yili Chairman Zheng Junhuai 20 years ago, that is, the core management has made significant contributions to the company but does not hold a high shareholding ratio, which may lead to the possibility of using administrative power to pursue personal interests and conflicts with shareholders and other stakeholders. Solving such problems should not be limited to the moral level, but should delve into the adjustment of the shareholding structure, give appropriate shares to the soul and key teams, balance their contributions and interests, and avoid corporate conflicts caused by excessive pursuit of personal interests. TCL Li Dongsheng's case shows a positive example of the successful realization of harmonious coexistence between management and enterprises through equity reform, while the historical Jin merchants have achieved the transformation from apprentices to owners through innovative "top stocks" and Confucian business values, as well as honest management, providing institutional and cultural support for the long-term prosperity of enterprises.
Mind map of this article:
1
The similarity between Vanke's recent events and the case of Yili Zheng Junhuai
Recently, Vanke has become the focus of market attention, and a series of events have occurred one after another.
First, Vanke's bonds are facing default, causing bond prices to fall sharply. Subsequently, another partner questioned Vanke Yuliang's team, accusing it of misconduct in the operation process and harming the interests of other stakeholders.
Although these allegations have not been confirmed, they have attracted widespread attention. This reminds me of the incident of Yili's chairman Zheng Junhuai 20 years ago, and the two have striking similarities in some ways.
2
The asymmetry between the interests of management and the company
Zheng Junhuai and now Yu Liang have one thing in common, that is, as the core management of enterprises, they have shaped these enterprises to some extent and made significant contributions to their development.
However, it is worth noting that despite their significant position in the company, they do not have a high percentage of shareholdings.
In this case, they are both the actual controllers of the company and the relatively small number of shareholders. This structural relationship may lead to the management using administrative power to expand its own interests in the course of operations, resulting in contradictions and conflicts with shareholders and other stakeholders.
3
Management mindset and ethical considerations
From the Vanke incident, we can get profound enlightenment. If a company relies too much on management, and the management is at a very high level and becomes the soul of the company, then it is easy for similar problems to occur without giving these soul people and founders sufficient equity. Whether it is the Yili Zheng Junhuai incident 20 years ago, or the Vanke whistleblowing incident that has not yet been decided today, they all reveal this regular phenomenon.
Therefore, we cannot look at this issue only from a general moral perspective. What is the mindset of the creators who have created the business but are not the main owners when faced with a situation where the benefits they have created have little to do with them?
In real life, it is very rare for someone to be able to serve others and the public interest without selfishness.
We need to think deeply about how to ensure that the interests of the management are properly balanced and protected while safeguarding their contributions.
4
The importance of shareholding structure and balance of interests
When resolving corporate conflicts, we should not just blame the moral cultivation of senior executives, but should immediately start to adjust the shareholding structure. In a reasonable manner, the appropriate shares are ceded to the soul and key people of the enterprise, even those who have become the actual controllers.
The reason for this is that when their primary interest comes from equity, rather than simply expanding their personal interests through business operations, they will no longer need to pursue excessive personal interests in their business operations.
Vanke's current Yuliang incident and the Yili incident in the early years were caused by the failure to properly resolve this issue. For the soul of the creation and leadership of the company, if they are not given their due shares, this essentially reflects the lack of depth of thinking of the company's shareholders.
If a company relies on a particular team without giving them an actual stake, sooner or later something will go wrong. When problems arise, we should not just blame the executives, but also look at whether the company's shareholders have enough foresight to make an early equity distribution and ensure that the core management and key people can become owners of the company.
This is exactly the case with Yu Liang and Wang Shi, without whom the company may not be able to continue to operate. In this case, the Yu Liang gang mentioned in the reporting materials should actually be regarded as a whole team, and we need to release the equity of the entire team.
While it may be a bit slow to act now, it's still a solution. Therefore, we need to take a deeper, more holistic view of the problem, rather than just scratching the surface and making moral accusations against executives.
In fact, this phenomenon has more to do with the shareholding structure and less to do with the moral cultivation of individuals.
5
Case study of equity reform
Take TCL's Li Dongsheng as an example, the company was originally a pure state-owned enterprise, and Li Dongsheng served as the factory director and operator, which is equivalent to an employee. However, with his personal talent and unremitting efforts, Li Dongsheng has successfully established TCL as a leading enterprise in China's electronics industry.
In this process, Li Dongsheng's role is as crucial as that of business leaders such as Yu Liang and Zheng Junhuai, who are the core elements of the company's survival and development. Without Li Dongsheng's contribution, TCL's glory would not be possible.
Although Li Dongsheng did not hold shares in the company in the early days, with the reform of the shareholding structure, he gradually became the soul and one of the core shareholders of TCL, thus ensuring the harmony and harmony of the company's internal relations.
This case provides us with profound lessons from both positive and negative aspects. The successful model of Li Dongsheng and TCL is worthy of reference from Vanke and other enterprises. This is not only the intrinsic demand of the organizational structure and equity structure of the enterprise, but also the objective embodiment of the importance of management in competitive industries.
In this context, for the long-term development of the company, the management should hold 20% to 30% of the company's shares, making it a major shareholder. In this way, many problems can be solved naturally.
6
Historical experience: Jinshang's equity system and business culture
In Chinese history, especially from the middle and late Ming Dynasty to modern times, the achievements of Jinshang Group in the field of commerce have attracted worldwide attention. Compared with other merchants in the same period, such as the Hui merchants, the business scale and influence of the Jin merchants were superior. So, what is the reason why Jin Shang can achieve such brilliant achievements?
After in-depth observation, we found that in the process of the rise of the Jin merchants, although the performance of Shanxi people in non-commercial fields such as imperial examinations, politics, and military was not outstanding, and there was no obvious advantage compared with other provinces, they were unique in the commercial field. This is not simply because Shanxi people are naturally shrewd or good at business, but because they have created a unique system - the life top stock system. At the heart of this system is the fact that it transforms the participants of all trade names into owners, thus greatly stimulating people's motivation and creativity.
Take Qiao's Business as an example, which later got involved in the ticket number business and created the famous Dade Pass number. Gao Yu, the shopkeeper of Dadetong, was originally an apprentice, and through years of hard work and dedication, he eventually became one of the owners of the business. This transition from apprentice to owner is a vivid manifestation of the top stock.
In addition, Jinshang not only created an equity incentive system, but also took the lead in implementing the pension system. This means that even after the big boss retires, they can still enjoy dividends for seven years. This system design undoubtedly provides a strong incentive and guarantee for the management, and also lays a solid foundation for the long-term and stable development of Jinshang.
The business culture values of Jin merchants are deeply influenced by Confucianism, emphasizing "righteousness and profit, benevolence and profit, and a great husband in the industry". This kind of business practice, guided by traditional Confucian concepts, enabled Jin merchants to always uphold integrity and morality in their business activities, and won wide social recognition and respect.
The key reason why Jinshang has been able to achieve such brilliant achievements in history is that they have created a unique equity system and business culture values. These institutions and cultural concepts not only provided a strong impetus and guarantee for the commercial activities of the Jin merchants, but also left a valuable legacy for the history of Chinese commerce.
Today, when we look at the management and system of modern enterprises, we may be able to draw wisdom and enlightenment from the historical experience of Jin merchants.