How Does The Communist Party Have On Corporate Governance?

1771 Words Dec 19th, 2016 8 Pages
Corporate Governance in China
December 19, 2016
Gabriella Russo

Research Question
What effect does the Communist Party have on corporate governance in China and how has it influenced the current system of corporate governance in China?
Literature Review
Corporate governance represents the structure associated with the management of activities at a firm in a manner that ensures the protection of the shareholders’ residual claims. Further, the concept elaborates the mechanism instituted at the organizational level to ensure that business operations conform to various legal, ethical, and social expectations. China represents one of the most dynamic and fast growing economies across the globe. The expansion of the Chinese market highlights the necessity for the adoption of business practices that reflect not only the national conditions but also international practices (Holmes & Wong, 2015). Issues concerning culture, laws, enforcement, and the constitution of boards in the Chinese environment should be reconsidered for China to sustain its momentum as one of the dominant emerging economies. The “Code of Corporate Governance for Listed Companies in China” provides the legal framework that underlines the structure approved for Chinese businesses (Holmes & Wong, 2015).
The regulations indicate that organizations should follow the two-tier structure for the board that includes the supervisory and board or directors. However, the control of the Chinese…
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