The game among the corporate controlling shareholder, the shareholder in power balance and the manager can lead to severe agency
problems. This paper regards the shareholder in power balance as another principal and applies the latest results about double-principal
agent theory in the research of manager tunneling, supervision cost and corporate performance, trying to solve the inconsistency of the above
corporate governance issue researched by domestic and foreign scholars. The main conclusions are as the followings. The correlation
among them depends on which one has a dominant position, the free rider effect of supervision or the positive externality effect
on cash flow right. Therefore, the key to excite the positive effect of the corporate governance mechanism such as the check-and-balance
of stock ownership is the degree of cooperation between shareholders.