Moral Hazard and Corporate Governance

Separation of modern company´s ownership from management determines that the key problem of corporate governance is to solve the interests´ conflicts of owner and operator, namely the principal-agent problem. This paper makes analyses of corporate governance mechanism through studying moral hazard problem. There might not be unified mode of corporate governance inside a country of transition economy such as our country. Every company should set up the effective mechanism according to its present stage and characteristics, and there must be one´s own characteristics of governance. Meanwhile, we should find the dynamic change of governance mechanism in a view of scientific development.