The role of financial institutions in the corporate governance of listed Chinese companies

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Author(s)

  • Rongli Yuan
  • Jason Zezhong Xiao
  • Nikolaos Milonas
  • Joe Hong Zou

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)562-580
Journal / PublicationBritish Journal of Management
Volume20
Issue number4
Publication statusPublished - Dec 2009

Abstract

This paper explores the role of Chinese financial institutions in the corporate governance of listed companies through interviews with both senior managers of financial institutions and board directors of listed companies. Our results show that, while most securities companies are passive investors, a good proportion of the active mutual funds help their portfolio companies prepare financial forecasts, standardize their operations, raise external funds, strengthen their company image in the capital markets, and sometimes intervene in corporate issues. This limited role can be attributed to a number of factors specific to the Chinese context including highly concentrated state ownership, an immature regulatory environment, inadequate transparency and disclosure of financial information, and weak corporate governance within financial institutions themselves. It could also be affected by several other factors that are considered to cause institutional passivity in developed countries such as conflicts of interest, monitoring costs and lack of expertise. © 2008 British Academy of Management.

Citation Format(s)

The role of financial institutions in the corporate governance of listed Chinese companies. / Yuan, Rongli; Xiao, Jason Zezhong; Milonas, Nikolaos; Zou, Joe Hong.

In: British Journal of Management, Vol. 20, No. 4, 12.2009, p. 562-580.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review