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The effectiveness of non-executive directors in chinese state owned enterprises

Kakabadse, N. K., Yang, H. and Sanders, R. (2010) The effectiveness of non-executive directors in chinese state owned enterprises. Management Decision. 48(7), pp. 1063-1079. 0025-1747.

Item Type: Article
Abstract: Purpose – The primary aim of this paper is to examine whether boards of directors with independent members function as effective corporate governance mechanisms in Chinese State-Owned Enterprises (SOEs), by analysing four characteristics of non-executive directors (NEDs) that impact on their effectiveness, namely their degree of independence, information, incentive, and competence. Design/methodology/approach – Being exploratory in nature, the research uses qualitative methods for data collection. It is based on an interpretivist perspective of social sciences, analysing and explaining the factors that influence the effectiveness of NEDs. Findings – The findings indicate that the NED system is weak in China as a result of the concentrated ownership structure, unique business culture, intervention of controlling shareholders and the lack of understanding of the benefits brought by NEDs. Research limitations/implications – The paper examines the salient features of and challenges to the system of NEDs of SOEs in present-day China. It provides an understanding of how the various perceptions of the board, gathered from in-depth interviews of corporate directors, leads to new interpretations of board effectiveness. The research, however, is limited owing to a relatively small sample size and the sensitive nature of the information collected. Originality/value – The study aims to fill gaps in the literature and contribute to it by assessing the “real” views and perceptions of NEDs in China in an institutional environment significantly different from that of the USA, the UK and other western economies
Uncontrolled Keywords: China; boards of directors; corporate governance
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD3611 Industrial policy. The state and industrial organization, including municipal services
H Social Sciences > HC Economic History and Conditions > HC94 By region or country > HC427.95 China
H Social Sciences > HD Industries. Land use. Labor > HD2709 Corporations > HD2745 Directors of corporations
Creators: Kakabadse, Nada K, Yang, Hong and Sanders, Richard
Publisher: Emerald
Faculties, Divisions and Institutes: University Faculties, Divisions and Research Centres - OLD > Faculty of Business & Law
University Faculties, Divisions and Research Centres - OLD > Research Centre > China and Emerging Economies Centre
Date: 2010
Date Type: Publication
Page Range: pp. 1063-1079
Journal or Publication Title: Management Decision
Volume: 48
Number: 7
Language: English
DOI: https://doi.org/10.1108/00251741011068770
ISSN: 0025-1747
Status: Published / Disseminated
URI: http://nectar.northampton.ac.uk/id/eprint/2763

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