Corporate governance in publicly-held companies: lessons for China’s companies limited by shares
University of British Columbia
Master of Laws - LLM
The thesis purports to address the current corporate governance in companies limited by shares in China, starting from a review of the theoretical debate between the contractual and legal regulatory theories in American corporate law scholarship. An optimal corporate governance should consists of a mix of mandatory corporate rules, markets and morality. The author argues that central to the debate is the balance between efficiency and fairness in reducing agency costs, which is contingent upon actual social circumstances. A review of Canadian corporate law and its literature is conducted from the perspective of corporate governance. Corporate statutes, securities acts and stock exchange polices are the foci in this study. The article concludes that the balance between directors' discretion in managing the company and accountability to shareholders should be presented in an optimal corporate governance. China's corporate laws and securities regulations have provided a governance frame, but left some loose ends to be refined. The author argues that China is following the North American experience which relies on the stock market and institutional investors in designing corporate governance, but suggests that cautions should be taken while addressing corporate governance in China with such a perspective. The state of stock markets and institutional investors in China does not justify too much optimism as to their significance in corporate governance. The intervention of the administrative organ authorised to oversee the stock market into corporate governance is necessary in light that laws and markets can not provide sufficient protection to shareholders.
Law, Peter A. Allard School of