CG Case Study Example | Topics and Well Written Essays - 500 words

CG - Case Study Example counting; not permitting enough freedom to the board of directors and sharing responsibility; and common deficiency of shareholders’ interests in the corporate governance ( Abrami et al. 3). Historical old practices of governance are responsible for adhering to different corporate mechanism based on two-tiered approach in most of the Chinese state-owned enterprises (SOEs). It is the sole reason of differences existing in Chinese publicly traded companies with that of the US or UK companies. Actually, the Chinese corporate structure has been historically impacted by its economic mechanism. In China, most of the large businesses were under state control. Managers in the past had been answerable to both the government policy initiatives and the business aims. The government had been the major stakeholder, therefore, its claim to fulfil its objectives were relevant and reasonable. Powers were also implicit in a firm’s Communist Party Committee, for making decisions in specific fields of governance, such as strategic planning (Abrami et al. 2-3). Change in the Chinese approach to managing listed companies happened later in 1990 in its attempt to practice globally agreed parameters of managing corporations. Thus, these differences existed till 1990 when the Chinese government started two stock exchanges in Shanghai and Shenzhen. These attempts were made to transform the procedures of corporate governance. Those companies, desiring to become listed companies were supposed to fulfil basic governance and securities law (Abrami et al. 2). Procedures smoothened with the formulation of the Chinese Securities Regulatory Commission (CSRC), which observed the functioning of these two exchanges and released a list of solid regulations. The primary job of CSRC is to â€Å"supervise the behaviour of listed companies and their shareholders who are liable for relevant information disclosures in securities markets† (Abrami et al. 2). In the past, there was no practice of