Berle and means, corporate governance and the Chinese family firm

While concentrating primarily on the Hong Kong experience this paper will analyse the nature of the Hong Kong Chinese corporation from the point of view of corporate governance. Only in very exceptional circumstances do Chinese business organisations in corporate form develop into anything like the traditional model of the Anglo-American Berle-Means corporation characterised by a separation of ownership and management. Rather, they have strong, culturally based, characteristics which determine a particular type of hierarchical structure and often a tendency, as elsewhere, for a relatively short life cycle of two to three generations. For those, often family dominated, companies which do become listed, problems of compliance with standards of corporate governance imposed by the corporate law and listing rules regimes are common. One of the problem areas which will be explored in this paper is the recent attempt to introduce independent non executive directors, as an example of the imposition of a corporate governance norm which may not be easily accepted in the context of the Chinese family dominated listed company. The corporate and securities regime of Hong Kong is about to undergo a major review. This paper will argue that any review which fails to consider and take account of the cultural context in which legal business vehicles, including registered companies, operate, is liable to exacerbate rather than remedy the compliance and governance problems currently encountered. Before doing so I wish to make some points concerning recent research on the Berle-Means corporation and the influence of history, politics and culture on the various types of governance structure prevalent on today's worldwide corporate scene.