Abstract: Corporate goverance, which could be summarized into three different kinds: American British model, mainland model, and South east Asia model, is an effective system in administration and control of corporation. In recent years, corporate governance has shown a worldwide tendency of converging. Especially after OECD issued the principles of corporate governance, some important agreements on the fundamental principles, demands, and frames of corporate governance were reached internationally. Reformation of China's state owned companies should be based on the combination of inside and outside supervision mechanism, while the former is the mostly recommended.