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Transforming corporate governance in Chinese corporations: a journey, not a destination

journal contribution
posted on 2018-12-01, 00:00 authored by Andrew Keay, J Zhao
The article offers a systemic, historical, and rigorous study of the transformation of Chinese corporate governance, focusing on its development from a totally administrative model, being one which relies on government and administrative power and imposes on corporations’ controllers administrative duties and objectives, to a hybrid model which has both administrative and economic governance characteristics. The article assesses whether administrative power will hinder corporate governance transformation in China on its journey towards a sound and sustainable model. We opine that the government continues to have a key role to play in corporate governance in China which makes administrative interference and power something that is embedded in corporate governance regimes through public and political policies, law enforcement, and strategic management policies for corporations. The administrative involvement might sacrifice efficiency, and effective market and corporate responses. However, it is observed that it may bring comparative advantages for Chinese corporate governance in terms of supporting long term strategic planning and the setting of multiple goals for State Owned Enterprises (SOEs, hereinafter), with government interference producing immediate action in order to prevent market failure.

History

Journal

Northwestern journal of international law and business

Volume

38

Issue

2

Season

Winter

Pagination

187 - 232

Publisher

Northwestern University School of Law

Location

Chicago, Ill.

ISSN

0196-3228

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2018, Northwestern University School of Law