Involvement of Creditors in Corporate Governance

According to the Company Law,the means of protection for the credit enjoyed upon the company can be divided into three levels:means outside the company Law,means within the Company Law and means of corporate governance.Contracts,guarantees and other means outside the company law,fail to break through the bottleneck externality and the protective effect is limited.The company law provides concrete means such as piercing the corporation veil,which are mainly protections outside the distribution of power and dependent and passive to the debtor corporate.Neither can solve the problem of credit endangered by non-normal decrease of company's assets. Meanwhile,the creditors,maintaining close ties with the company and being suppliers for the assets of the company, have to bear the disproportionate management risk and pay bills for the shareholders for their opportunistic behaviors. Effective means of creditor protection must be sought within the framework of corporate governance and creditors should retain and maintain their voice in the disposition of the company's assets.It is further confirmed by the status of creditor protection and practice of China.