Publication: Corporate Governance and Enterprise Reform in China : Building the Institutions of Modern Markets
Date
2002-03
ISSN
Published
2002-03
Author(s)
Tenev, Stoyan
Zhang, Chunlin
Brefort, Loup
Abstract
This book explores the short- to
medium-term corporate governance issues that China is
encountering during the course of corporation and ownership
transformation of its enterprise sector. The study looks at
companies participating in the two main forms of ownership
diversification: listed companies and small and medium
enterprises whose ownership structure is dominated by
insiders. The focus is on the new mechanisms and
stakeholders emerging during the process of ownership
diversification and their role in corporate governance.
Recommended priorities for action are based on the following
guiding principles: 1) Corporate governance scandals in
emerging and developed markets indicate that there is no
perfect corporate governance model. An effective corporate
governance system should be capable of identifying
weaknesses before they develop into systemic problems. 2)
The institutional mechanisms of corporate governance
comprise a system that can employ alternative yet
complementary instruments of control to effectuate changes
in companies' behavior. Based on these principles, the
following areas emerge as recommended priorities for policy
action: a) alleviate the negative impact of dominant state
ownership on market discipline and on the regulatory
capacity of the state; b) building an institutional investor
base; and c) strengthening the role of banks in corporate governance.
Citation
“Tenev, Stoyan; Zhang, Chunlin; Brefort, Loup. 2002. Corporate Governance and Enterprise Reform in China : Building the Institutions of Modern Markets. © Washington, DC: World Bank and the International Finance Corporation. http://openknowledge.worldbank.org/entities/publication/09846adb-7ca3-51b3-b1ab-5d3dfcbc9c19 License: CC BY 3.0 IGO.”