Current Studies on Corporate Governance in China

This paper mainly describes the situation, predicament and reasons about changing and reform of corporate governance of SOEs in China. Some consider that corporate governance of SOEs should be under the control of government, but others are against. Debate between them helps greatly to deepen understanding the changing and reform of corporate governance of SOEs.     

Corporate governance and incentive contracts: Historical evidence from a legal reform

This paper proposes to exploit a reform in legal rules of corporate governance to identify contractual incentives from the correlation of executive pay and firm performance. In particular, we refer to a major shift in the legal and institutional environment, the reform of the German joint-stock companies act in 1884. We analyze a sample of executive pay for 46 firms for the years 1870–1911. In 1884, a legal reform substantially enhanced corporate control, strengthened the monitoring incentives of shareholders, and reduced the discretionary power of executives in Germany. The pay–performance sensitivity decreased significantly after this reform. While executives received a bonus of about 3–5% in profits before 1884, after the reform this parameter decreased to a profit share of about 2%. At least the profit share that is eliminated by the reform most likely was incentive pay before. This incentive mechanism was replaced by other elements of corporate governance.     

Executive pay in Japan: the role of bank-appointed monitors and the Main Bank relationship

A feature of tournament models is that executive compensation is not independent of the wages paid at lower levels of the corporate hierarchy. Agency models show that compensation based on firm performance is a means by which incentives can be provided to executives once a promotion tournament has been resolved. In this paper, we combine elements of both models and show that the existence of an outsider who monitors the firm’s activities will lower the sensitivity of pay to firm performance for top executives and reduce the importance of tournament-based incentives. Using panel data for 55 Japanese electronics firms, we find support for the notion that bank-appointed Board members help monitor top executives and that tournament considerations are a particularly important feature of executive compensation in Japan.     

Corporate Governance Reforms in the Post-1997 Asian Crisis: Is There Really a Convergence to the Anglo-American Model?

Abstract

Following the 1997-Asian crisis, a number of crisis-hit countries were committed to the rapid transformation of the corporate governance system to one that is modeled after the Anglo-American system. This, as the article argues, is based on a false premise, that what may have worked in the United States/United Kingdom can also be applied in East Asia. In this regard, the convergence at the firm level is seen to be more in “form” rather than in “substance”. This study assesses Singapore's corporate system in terms of its recognition of the merits of the Western model. It then details the corporate governance style of Temasek Holdings Limited (THL), a state- owned enterprise (SOE) in charge of monitoring government investments in companies. The choice of THL as a case study is based on the premise that THL operates very much like a private sector corporation. In addition, it has the ability to influence the standard of corporate governance of Singaporean SOEs. Because the SOEs are large players in their respective industries, the corporate governance of SOEs establish the standards and expectations for monitoring in non-SOEs. There are indications to suggest that the THL has taken into consideration certain aspects of corporate governance practices that may not necessarily be in line with those advocated by the Singapore government. The article argues that selective adaptation such as the style adopted in the THL more realistically portrays the corporate governance practices of East Asian corporations.     

High benefits and low wages: Employees as monitor of management in SOEs

Employees do play a role in corporate governance as important stakeholders of modern enterprises. In the absence of financial and managerial labor markets in centrally planned economies (CPE), the owner of state enterprises (SOEs) has no effective mechanisms to discipline management. Therefore, the role of employees in corporate governance becomes much more important in SOEs than in the typical capitalist private firm. We posit that low wages and generous benefits in SOEs provide incentives for employees to monitor management. Other employment arrangements, especially lifetime job security and centralized wage scale, are also conducive to the monitoring of management by employees. A formal model shows that benefits tied to firm performance, designed properly, induce employees to monitor management. It also suggests that the existence of a market for managers tends to undermine this mechanism.     

Are stronger executive incentives associated with cross-listing? Evidence from China

This study examines whether firms incorporated in mainland China benefit from cross-listing in Hong Kong, China. The Hong Kong Stock Market has more stringent rules regarding corporate governance and a better system of investor protection than the mainland market. Hong Kong companies generally provide strong incentives to executives via equity-based compensation. Have cross-listed companies learned from Hong Kong firms about adopting these strong executive incentives? The evidence from this study suggests that changes in top executive compensation are more sensitive to sales growth in cross-listed firms than they are in mainland firms without cross-listing. However, compared to Hong Kong firms, cross-listed firms are less sensitive to stock returns. Further, this study shows that it is necessary to differentiate between state-owned companies and private companies, as cross-listing may have a greater impact on executive incentives in state-owned companies than it does in private companies.     

社会地位、在职消费与激励绩效

对企业高管进行有效激励，降低企业的激励成本，有利于企业的平稳运行和经济的繁荣发展。文章以2003-2014年所有A股上市公司为样本，对在职消费通过彰显"地位"、"威望"等而对企业高管产生的激励作用进行检验。研究发现，"地位"、"威望"等精神层面的非物质因素对企业高管具有激励作用，并在激励效果上对货币薪酬具有替代作用：国有企业中，在职消费更可能作为货币薪酬的替代性补偿而产生激励作用；民营企业中，在职消费更可能发挥精神层面的激励替代作用。而在货币薪酬等物质激励得到相对满足的情况下，考虑了"地位"、"威望"等精神因素的激励契约具有更高的激励相容性，能够有效地为企业节约激励成本，提高内部资源配置效率，进而提升股东价值。     

Financial distress and non‐executive director compensation: Evidence from state‐owned enterprises in South Africa post King III

Using a sample of South African state‐owned enterprises (SOEs), we examine the pre‐ and post‐period impact of King III on non‐executive director (NED) compensation with emphasis on financially distressed SOEs. This paper adopts a difference‐in‐differences analysis technique with repeated measures as the basis for testing the hypotheses. The revised Altman Z‐score model which incorporates features unique to emerging markets is used to measure financial distress. Our findings indicate that SOEs that adopted King III will increase NED compensation when the firm has a positive performance and will severely penalize NED when the firm faces financial distress. This study highlights the importance of well‐crafted corporate governance policies. It further sheds light on the importance of King III and how its implementation may prove vital for the success of an enterprise.     

From State to State: Quasi-privatization and Firm Performance

This paper uses a sample of Chinese listed companies whose controlling shareholders have changed from government agencies to state-owned enterprises＇ （SOEs）, to examine whether reducing government intervention while maintaining government＇s ultimate control could improve firm performance. The results show that the overall performance of these firms improves after the transfer of their controlling shareholders, due to improvements in both operating and non-operating performance. When we separate all samples into solely SOEs and other SOEs based on the controlling shareholder, we find that operating performance improved significantly in the solely SOE group, whereas non-operating performance improved significantly in the SOE group. In addition, we identify sources of performance improvement from two perspectives： corporate governance and related party transactions. The results imply that the Chinese Government should continue to decentralize control and, at the same time, continue to monitor firm operating efficiency.     

The Roles of Corporatization and Stock Market Listing in Reforming China’s State Industry

This article provides an overview of China’s on-going efforts to reform its industrial state-owned enterprises (SOEs) through corporatization and stock market listing, and assesses the effects on the performance of these SOEs. It highlights changes, though limited, in both ownership pattern and corporate governance on the one hand, and rapid increase in concentration on the other as a result of these reform measures. It also explores the reasons why these changes have failed to significantly improve the performance of the SOEs, but have nevertheless paved the way for more complete privatization. The practical implications of these findings are also discussed.     

从西方公共治理视角审视公司治理

从国内外公司治理实务的现状出发,文章提出公司治理可以向公共治理借鉴的观点.国外政治领域中用采控制和规范政府官员的制度可以给我们一些如何改进公司治理的新见解.最后,从三个具体方面论述建议:公司内部分权、高管薪酬和高层职位的继任规则.     

薪酬政策、经营业绩与国有上市公司高管薪酬——基于国有上市公司分类的实证研究

国有企业员工薪酬体系优化与员工激励机制建设一直是国企改革的重点。为此,对高管薪酬制度现状以及国有企业高管薪酬政策等相关文献进行系统分析,梳理影响国有上市公司高管薪酬的因素,建立面板数据分析模型,选取2010—2020年中国国有上市公司样本,探究不同类型的国有上市公司高管薪酬与经营业绩、薪酬政策的关系。研究发现,高管薪酬政策与经营业绩对两种类型的国有上市公司的高管薪酬具有显著的正向影响。基于研究结论,从政府薪酬管制、公司治理、增强高管薪酬的业绩敏感性、改进薪酬激励的方式等角度,分别对两类国有上市公司提出管理建议。     

From share issue privatisation to non‐tradable share reform: a review of privatisation in China

Privatisation in China has proceeded on a gradual path over 30 years. In this paper, we present a detailed review of China's privatisation programmes from its Share Issue Privatisation (SIP) to its Non‐tradable Share (NTS) reform. The SIP was a primary offering process with state‐owned enterprises (SOEs) issuing new shares to private investors, but after their Initial Public Offering (IPO) approximately two‐thirds of the shares remained non‐tradable and were mainly held by the government. The SIP achieved only limited success because of its partial trading and partial privatisation, which led to the implementation of the NTS reform in 2005. The NTS reform aimed to dismantle the split share structure and provide opportunities for improving corporate governance and further privatisation. The review shows that the NTS reform has yielded greater success in improving firm performance and corporate governance than the SIP.     

Executives' Legal Records and the Deterrent Effect of Corporate Governance

We study whether the effectiveness of corporate governance mechanisms varies depending on the characteristics of the executives subject to these mechanisms, namely their “psychological type,” as proxied by their history of legal infractions. In particular, we examine insider trading, where we can compare the trading behavior of different types of executives in the same firm. We find that “recordholder” executives, that is, those with prior legal infractions, earn significantly higher profits from purchases and sales than nonrecordholder executives. Furthermore, the profitability of both purchases and sales is significantly increasing in the severity of the infraction. Governance mechanisms, such as blackout policies, lower profits of executives with only traffic infractions; however, profits for executives with serious infractions appear insensitive to blackout policies. Insiders with serious infractions are also more likely to trade during blackout periods and before large information events and are more likely to report their trades to the SEC after the filing deadline. Collectively, our evidence suggests that while governance mechanisms can discipline executives with minor offenses, they appear largely ineffective for those with more serious infractions.     

党组织参与公司治理与民营企业高管腐败

随着改革的深入,民营企业的健康成长已然攸关中国经济的可持续发展和社会稳定。但近年来频发的民营企业高管腐败问题屡禁不止,即使在高压反腐的背景下,这一问题仍然没有在根本上得到遏制。基于此,文章从基层党建的角度出发,探讨了党组织参与治理对于民营企业（高管）腐败的影响机制和效果。利用2004-2017年中国上市民营公司数据,作者发现：作为正式化、制度化和常态化的治理安排,企业内部党组织的建立能够有效抑制高管腐败的发生,这得益于党组织参与企业治理过程中的监督、协调和推动企业廉洁文化建设方面的作用。进一步,党组织参与治理还能够显著弱化高管权力集中以及家族涉入所带来的不利影响。由此,文章丰富了民营企业高管腐败和党建工作方面的研究文献,为民营企业如何更好地监督和约束高管腐败提供了实践启示。     

Foreign investment,corporate governance and performance in the Chinese listed A Share companies

We present a novel lens on the presence and impact of qualified foreign institutional investors (QFII) in top shareholdings of the non-financial domestically listed Chinese ‘A’ share firms. The initial results suggest that the presence of a QFII as a top shareholder in these companies is associated with their better performance, using both Tobin’s Q and ROA as the performance measures. Our models include variables representing corporate governance mechanisms, foreign legal person shares, a proxy for international affiliations and a number of time-variant firm characteristics. Economically, the coefficient of impact on the market measure is the more significant, while the effect of having a QFII in top shareholdings on both performance measures is empirically significant. Previously, studies have often ignored the potential for reverse causality beyond using lagged regressors. This is problematic. Therefore, we follow up with a 2SLS instrumental variables and system GMM model to further mitigate this potential and find the empirical relationship holds. Contrary to earlier work on QFIIs and governance post-implementation of the QFII scheme, the findings from our models suggest that the presence of a QFII top shareholder augments market performance holding equal existing corporate governance mechanisms and other controls.     

国有企业产权改革的法和经济学分析

本文从法和经济学的视角,运用产权理论和企业理论,对以法规和行政指令等形式表现的政府对国有企业产权改革的制度设计和安排,即国有企业产权改革的规则变迁、绩效进行分析,并在此基础上对社会主义市场经济下的政府、企业和市场的关系,国有企业改革的出路进行探讨。文章认为,有     

上市银行公司治理结构对高管薪酬影响研究

合理的薪酬方案能实现有效地激励上市银行高管,其薪酬方案由银行董事会制定,与上市银行治理结构息息相关。上市银行高管薪酬与国家股的比例、股权集中度、独立董事人数以及董事会、监事会会议成正比;而与法人股的比重成反比;至于监管代理机构的规模则基本没影响。上市银行公司治理结构中的一些约束与控制性因素需要进一步完善,从而促进银行业的健康发展。     

创业导向下女性高管对家族企业财务绩效的影响——来自性别属性与家族属性的双重效应

文章通过区分家族女性高管和非家族女性高管两类群体，实证检验了在家族企业创业成长的过程中，性别属性与家族属性带来的双重影响。研究结果表明，与独立型女性高管相比，与控制家族有血缘关系的亲缘型女性高管参与治理会对家族企业财务绩效产生更为积极的影响，且在内部创业导向下该积极作用更显著。独立型女性高管对财务绩效无直接显著作用，且在内部创业导向下，会削减家族企业的绩效，在外部创业导向下也没有体现出积极作用。本研究揭示了在以内部创业导向为主的家族企业中，家族经验、家族关系等家族属性可以一定程度上弥补女性角色在家族企业治理中的不足，为日益蓬勃的女性后代继任的家族企业创业成长给出了一定的有益指导。     

CEO Hedging Opportunities and the Weighting of Performance Measures in Compensation Contracts

This study examines the rather controversial practice of managerial hedging, which allows CEOs to delink their compensation from stock price performance. We presume that boards are aware of these practices and adjust the weights placed on accounting‐based and stock‐based performance measures in executive compensation contracts to mitigate the problem. Empirically, we find that, in the presence of managerial hedging opportunities, accounting‐based performance measures receive more weight, whereas stock‐based performance measures receive less weight in determining executive compensation. Moreover, these results are more pronounced when managerial hedging needs are high. Regarding the effects of earnings management resulting from accounting‐based incentives, we find that good auditing and strong governance mechanisms strengthen the benefit of placing more weight on accounting‐based performance measures. Taken together, our findings suggest that corporate boards shift the relative weights of performance measures in compensation contracts in response to managerial hedging opportunities, which is consistent with optimal contracting.