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The essence of corporate governance is the formation of sound governance mechanisms, through this mechanism, the right to make reasonable arrangements, distribution of benefits, settlement of the principal, thus improving business performance. Corporate governance structure is the set of institutional system arrangements, these arrangements will determine the corporate goal, behavior, and among the huge stakeholders, for example:shareholders, creditors, operators, employee, suppliers and customers, by who controls enterprise, how to control the business, how to distribute risks and returns between different subjects. Can also it be said for a set of legal, cultural and institutional arrangements concerning corporate control and residual claims allocation.From the practice of States, the corporate governance structure dominant in Britain, the United States and other countries is different in Germany, Japan and other countries, and the corporate governance structure in countries is not made and natural, immutable. Existing national long-term corporate governance is a historical result of evolution. Germany’s Siemens AG (Siemens Aktiengesellschaft) was founded in 1847, after 160 years of development; it has become a well-known large company with its product sales to 190 countries. This achievement is closely related to Siemens focusing on continuous improvement of its corporate governance. Siemens Corporate Governance, the German typical supervisory and managing boards are its main features. Siemens is listed in 2002, the New York Stock Exchange; that means it must comply with German and U.S. corporate governance regulations. Since then, Siemens corporate governance structure is changing from a Germany standard to a new style fit for worldwide listed companies involving characters of both Anglo-Saxon and the Rhineland model. Siemens corporate governance mechanisms have a relatively complete; it is a two-tier committee system:Supervisory+ management board system. The traditional German supervisory board has the key power to control the company actual running, but in recent years, Siemens Management Board and CEO’s power and importance is constantly increasing, especially for the payment and equity incentives of management board and CEO are on the rise. The effect of governance developing is reflected in better and better corporate performance; during 1998-2008, Siemens achieved a high growth rate, reaching a high level of performance in the history. But after that, but "bribery scandal" incident shocked the world, the incident almost bring this industrial giant disastrous result. After the bitter experience, Siemens re-focus on its corporate governance. With maintaining the existing advantages, they introduce a very strict system of compliance and the rules penetrate into every aspect of corporate operation. Never too late when, with the various efforts the company continues to maintain a good corporate fame and even more gets the chance to pave the way for the greater development in future. Based on studying the Siemens corporate governance structure, especially the characteristics of its management board will help us better understand the advantages of multinational companies in western developed countries and its corporate governance issues; and it is believed there will be a good reference for the development of Chinese listed stock company.
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