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Article
Publication date: 31 December 2015

Fang Ma

The purpose of this paper is to assess the application of the nascent corporate opportunity doctrine in China by comparison with its well-established English counterpart;…

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Abstract

Purpose

The purpose of this paper is to assess the application of the nascent corporate opportunity doctrine in China by comparison with its well-established English counterpart; in particular, it evaluates whether the fine balance between business integrity and business efficiency has been struck.

Findings

It is argued that the scope of application of the corporate opportunity doctrine in China should be extended, and the rules on the burden of proof should be amended. Moreover, a stricter approach should be adopted by the Chinese judiciary for the purpose of protecting the company’s interests and enhancing business integrity.

Research limitations/implications

This paper mainly focuses on the corporate opportunity doctrine. It does not discuss other duties of directors in detail.

Practical implications

It is useful for directors in balancing business integrity and business efficiency.

Originality/value

It is an original piece of work which assesses the corporate opportunity doctrine by making comparison with English law.

Details

Journal of Financial Crime, vol. 23 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 5 January 2015

Charles KN Lam and S.H. Goo

The purpose of this paper is to demonstrate how Confucianism can be applied in the areas that are now governed by company law in the common law system and how it can play…

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Abstract

Purpose

The purpose of this paper is to demonstrate how Confucianism can be applied in the areas that are now governed by company law in the common law system and how it can play a role in improving corporate governance. A gentleman in the context of Confucianism tends to be inclusive and broad-minded in embracing the interest of different stakeholders. In fact, he will balance the interests of shareholders and other stakeholders if there is any inherent conflict and try to achieve a win-win situation. Ultimately, he will run the company not just for profit-making but for social justice and commitment.

Design/methodology/approach

The authors examine the leading cases in Hong Kong and the United Kingdom about the law of fiduciary duty and the duty of care and its relationship with Confucianism. In this respect, we review the teachings of the traditional Confucian texts and use Confucianism to fill in the gap where common law rules cannot reach. In addition, we adopt a comparative study approach in examining the law of directors’ duties in Hong Kong, China and the United Kingdom.

Findings

It can be seen that the concept of fiduciary duty and duty of care is quite complicated and evolving and always subject to the interpretations of the court from time to time. For fiduciary duty, the term itself is quite conceptual and not immediately available to the general public. But loyalty in the context of Confucianism is a very lively and down-to-earth moral principle. Besides, fiduciary duty is imposed from outside, where directors had no choice but to accept. But loyalty in the context of Confucianism is something inherent and something from within. It is a moral principle that if you deeply understand the meaning of it, you will automatically accept it as a good virtue and your conduct will naturally be guided by such a principle. Confucianism can thereby be used to fill the gap where rules and regulations cannot reach. Confucian business ethics and common law rule should be complementary to each other in the development of a Chinese corporate governance system.

Originality/value

This paper is the first of its kind in discussing the relationship between the law of directors’ duties and Confucianism. It argues that Confucianism plays a crucial role in guiding the behavior of the directors and can supplement the abstract principles of directors’ duties in the context of a Chinese corporate governance system.

Book part
Publication date: 7 January 2015

This chapter analyzes and discusses the empirical results of the study. The discussion is organized under the following themes: independent director, audit committee…

Abstract

This chapter analyzes and discusses the empirical results of the study. The discussion is organized under the following themes: independent director, audit committee, auditor independence, corporate code of conduct, adoption of IFRS, and measures for improvement. Three main findings emerge from the analysis. First, the current institutional environment does not yet fully support the Anglo-American practices. Second, in recent years the quality of financial reporting has improved considerably, which is largely attributable to strengthened accounting rules and regulations. However, the imported Anglo-American models of corporate governance and financial reporting, except for enhancing auditor independence, have had only a minor impact on financial reporting quality. Third, although the imported practices are not working as intended, the vast majority of interviewees stated that it was appropriate to move toward internationally acceptable principles and standards. Improving laws and regulations seems to be the main measure for rendering the institutional environment in China more supportive of Anglo-American models of corporate governance and financial reporting.

Details

Adoption of Anglo-American Models of Corporate Governance and Financial Reporting in China
Type: Book
ISBN: 978-1-78350-898-3

Keywords

Article
Publication date: 10 May 2013

Xianwei Lu, Jianqiong Wang and Dayong Dong

The purpose of this paper is to analyze and examine the relationship between busy boards and corporate performance in China.

Abstract

Purpose

The purpose of this paper is to analyze and examine the relationship between busy boards and corporate performance in China.

Design/methodology/approach

Based on a sample of non‐financial listed companies in the Chinese stock market from 2007 to 2010, by defining several measures of busy board, the paper investigates the relationship between busy boards and corporate performance in China.

Findings

The paper finds many busy boards in Chinese listed companies; compared to companies without multiple directorships, the companies with multiple directorships have better corporate performance; the number of multiple directorships in boards should maintain a certain ratio, or the busy boards will be harmful to the corporate performance.

Originality/value

This is the first paper to analyze and examine the impacts of busy boards on firm performance in China directly. The findings are also useful to regulation of limiting the numbers of independent directors seated on other boards.

Details

China Finance Review International, vol. 3 no. 2
Type: Research Article
ISSN: 2044-1398

Keywords

Article
Publication date: 1 January 2013

ChunLei Yang and Sven Modell

The purpose of this paper is to explore how performance management practices are implicated in the exercise of power with particular reference to the ability of individual…

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Abstract

Purpose

The purpose of this paper is to explore how performance management practices are implicated in the exercise of power with particular reference to the ability of individual managers to balance between more or less institutionalized conceptions of performance while pursuing organizational change.

Design/methodology/approach

The paper builds on a longitudinal field study in a Chinese local government department conducted over a period of six years.

Findings

Recent reforms in the Chinese government sector have resulted in an incomplete shift between moral‐ and merit‐based conceptions of performance. The focal manager in this analysis initially balanced successfully between these conceptions of performance whilst pursuing a degree of organizational change, but was ultimately transferred as the power relationships forged through her manoeuvring were radically reversed. Whilst this balancing act was facilitated by the simultaneous embeddedness of the manager in both conceptions of performance, she experienced growing difficulties in maintaining such a position as a means of nurturing critical power relationships.

Research limitations/implications

The empirical analysis underscores the importance of examining institutional embeddedness as a multi‐layered phenomenon constituted by institutionalized expectations as well as internalized values and beliefs of individual actors. The varying degree of alignment of these constituent elements of embeddedness has important implications for the ability of managers to balance between diverse conceptions of performance and effect change and the configuration of power relationships.

Originality/value

In contrast to much previous research on performance measurement and management the paper analyzes power as a dynamic and relational concept. The study also sheds new light on the notion of institutional embeddedness by underlining its multi‐layered nature and how this gives rise to potential value conflicts among individual actors.

Details

Accounting, Auditing & Accountability Journal, vol. 26 no. 1
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 15 May 2009

Yuan Dujuan

China has hitherto followed the US model of corporate governance, but recent crises suggest that that might not be the model to follow. This paper aims to consider that…

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Abstract

Purpose

China has hitherto followed the US model of corporate governance, but recent crises suggest that that might not be the model to follow. This paper aims to consider that proposition.

Design/methodology/approach

This is a comparative study of US and Chinese systems of corporate governance.

Findings

Corporate governance is an alien concept for China. The establishment of the China company law system came later than western nations' corporate law system. Since 1992, China has made substantial progress in several areas of corporate governance. It is well known that for nearly a hundred years the American‐style corporate governance mechanism has been the model of the countries in the world. And China also follows the example of American corporate governance. Against the background of the global financial crisis, it is time to reflect upon the model of corporate governance in China.

Originality/value

The paper invites reflection on existing paths towards good corporate governance in China.

Details

International Journal of Law and Management, vol. 51 no. 3
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 10 July 2009

Niu Yuan

China adopted an independent director system in 1997 in order to perfect company management structure in the country. The purpose of this paper is to assess the…

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Abstract

Purpose

China adopted an independent director system in 1997 in order to perfect company management structure in the country. The purpose of this paper is to assess the effectiveness of that system.

Design/methodology/approach

This paper starts from the current status of the independent director system in the country and gives comments on the independent nature and designation procedure of the independent directors, rationalization of the incentive system and completion of responsibility mechanism.

Findings

The unique function of the independent director system plays a decisive role in preventing control by people within a public company, minimizing power abuse by shareholders and best maintaining the interests of medium and small shareholders. But there still exists certain shortcomings in independent director system in China such as unclear of the independence nature, irrationality of designation method, incomplete incentive system and short of relative responsibility mechanism which restrict independent director system to be brought into full play.

Originality/value

Management of a company is always a hot topic in the company law and an independent director system is a very important aspect. On the basis of learning from advanced experience from the western world, China imported the independent director system to improve the management system of its companies. This paper analyses defects of the current independent director system in China and puts forward improvement measures.

Details

International Journal of Law and Management, vol. 51 no. 4
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 30 July 2020

Kenneth Lan

This writing reveals Hong Kong’s role as the center of China research. Before Reform and Opening in 1979, the British colony was the only place in the world where all…

Abstract

Purpose

This writing reveals Hong Kong’s role as the center of China research. Before Reform and Opening in 1979, the British colony was the only place in the world where all international China experts stopped over and obtained the latest and the most accurate accounts of PRC.

Design/methodology/approach

The paper analyzes how Hong Kong serves as the intellectual mecca through examining the lives of China scholars amid building up their international profiles. What prompted them to join the China field? How were their lives like in the British crown colony? This paper also unveils the roles of the two research institutions played on Communist China studies: University Services Center (USC) and Union Research Institute (URI). In addition to relying on archival correspondences, personal interviews were also conducted in the last two years.

Findings

Despite being the mecca of PRC research, Hong Kong was not the first destination for most aspiring China scholars from the West. Most of these Western scholars did not even plan to devote their whole working lives to the study of China. Through luck, draft avoidance and generous grants from Ford and Carnegie Foundations, these young men and women became internationally iconic figures of East Asian research. To complete their Ph.D. theses and subsequent China-related projects, Hong Kong was a “must-go” destination for them. Under the full protection of the Union Jack, these scholars enjoyed the freedom to speak, write, research and publish. God blessed Hong Kong with such a unique political status amid the Cold War.

Originality/value

155 Argyle Street was the Art Deco compound where Red China experts produced most groundbreaking scholarships. It was not only a two-story structure where they acquired their first-hand resources but a platform where any China-related topics were discussed openly under the auspices of British colonial rule of law. Despite claiming themselves as apolitical, both USC and URI were products of US containment policy against communism. Even so, the colonial government never prohibited the two’s operations. Through this paper, readers will also discover how young men and women became inspired into a career in China studies.

Details

Asian Education and Development Studies, vol. 11 no. 1
Type: Research Article
ISSN: 2046-3162

Keywords

Article
Publication date: 1 October 2004

Nada K. Kakabadse, Andrew Kakabadse and Alexander Kouzmin

There are many ways to construct an incentive program. However, most compensation plans tend to be focused on profitability and profitability‐related accomplishments with…

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Abstract

There are many ways to construct an incentive program. However, most compensation plans tend to be focused on profitability and profitability‐related accomplishments with little or no incentive for corporate social responsibility. Director's compensation continues to climb with the United States leading and Britain following modestly behind. The question as to where fair pay ends and over‐compensation begins – and what that means for the community – is rarely raised. In order to understand the impact of fair and over‐compensated director's pay on other stakeholders, a geo‐political perspective is proposed that builds on knowledge of existing theories of the firm.

Details

Personnel Review, vol. 33 no. 5
Type: Research Article
ISSN: 0048-3486

Keywords

Article
Publication date: 25 October 2022

Piyush Sharma, Tak Yan Leung and Pattarin Adithipyangkul

This paper aims to combine the agency theory and efficiency wage theory to explore the effects of relative compensation for executive directors with marketing experience…

Abstract

Purpose

This paper aims to combine the agency theory and efficiency wage theory to explore the effects of relative compensation for executive directors with marketing experience on two marketing outcomes (marketing efficiency and market share) and the moderating roles of ownership type (private vs state-owned enterprises) and market concentration in this process.

Design/methodology/approach

A total of 2,753 firm-year observations from Chinese listed companies (from 2010 to 2014) were retrieved from China Stock Market and Accounting Research database and analyzed using firm random-effects with industry, year and region fixed effects.

Findings

Relative compensation has a positive effect on both marketing efficiency and market share, and these effects are moderated by ownership type and market concentration. Specifically, the positive effect of relative compensation on marketing efficiency and market share are stronger for central state-owned enterprises (SOEs) compared to local SOEs and private-owned enterprises but the results are mixed for market concentration.

Research limitations/implications

This study shows that paying higher compensation to the executive directors with marketing experience can enhance marketing performance, but the data does not allow identification of the actual actions taken by these directors for this.

Practical implications

This study highlights the importance of appropriate compensation for directors with marketing experience to motivate them to make better marketing decisions to overcome the challenges posed by market concentration and agency conflicts.

Originality/value

This paper points out the importance of having directors with marketing experience and paying them suitable compensation to motivate them to be more effective.

Details

European Journal of Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0309-0566

Keywords

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