Corporate Governance in China: Then and Now

Corporate governance has become a globally debated topic. As multinational corporations enter new global markets, complications abound due to the myriad of corporate governance rules existing among the various legal systems. One example of the new markets becoming more available to American investment is the Chinese market. In light of both the grant of permanent normal trade relations (PNTR) to China and China's anticipated membership in the World Trade Organization (WTO), the American business community is apt to find more opportunity for investment in China. American investors are likely to be increasingly interested in understanding the current Chinese corporate governance regime as they consider the Chinese market for investment of their assets. The goal of this paper is to provide an analysis of the corporate governance system in China and offer some suggestions for improvement to make the Chinese market more attractive to foreign investors. This paper is organized as follows. Part I provides general background information on the historical corporate governance structures prevalent in China. Part II then analyzes current governance issues, in particular those occurring in the context of corporatization of China's State-owned enterprises. Part III offers proposals for reform and is followed in Part IV by our concluding remarks.http://deepblue.lib.umich.edu/bitstream/2027.42/39791/3/wp407.pd

Corporate Governance in China: Then and Now

Corporate governance has become a globally debated topic. As multinational corporations enter new global markets, complications abound due to the myriad of corporate governance rules existing among the various legal systems. One example of the new markets becoming more available to American investment is the Chinese market. In light of both the grant of permanent normal trade relations (PNTR) to China and China's anticipated membership in the World Trade Organization (WTO), the American business community is apt to find more opportunity for investment in China. American investors are likely to be increasingly interested in understanding the current Chinese corporate governance regime as they consider the Chinese market for investment of their assets. The goal of this paper is to provide an analysis of the corporate governance system in China and offer some suggestions for improvement to make the Chinese market more attractive to foreign investors. This paper is organized as follows. Part I provides general background information on the historical corporate governance structures prevalent in China. Part II then analyzes current governance issues, in particular those occurring in the context of corporatization of China's State-owned enterprises. Part III offers proposals for reform and is followed in Part IV by our concluding remarks.corporate governance, law reform, China, corporate law

ECOLOGY AND VIOLENCE: THE ENVIRONMENTAL DIMENSIONS OF WAR

Research reported by Thomas Homer-Dixon characterizes five social effects that can significantly increase the likelihood of violence in the emerging world, effects that are far deeper than can be controlled by security forces: (1) constrained agricultural production, often in ecologically marginal regions; (2) constrained economic productivity, mainly affecting people who are highly dependent on environmental resources and who are ecologically and economically marginal; (3) migration of these affected people in search of better lives; (4) greater segmentation of society, usually along existing ethnic cleavages; and (5) disruption of institutions, especially the state.1 These kinds of social effects create tensions that can erupt in violent expression. It is difficult to envision how additional security forces will solve the embedded social problems that link violence with economic, social, ethnic, and even religious frustrations. This manuscript seeks to address these concerns. Part I elaborates ways in which these issues of violence manifest themselves in a globalized economy. Part II discusses the business implications of these tensions and suggests a way in which business can be a mediating actor to lessen these tensions. Part III concludes with a suggestion for a recharacterization of the corporation in a way to sensitize it to the ecological-mindedness necessary to address the potential issues of violence in societies. We propose sustainable peace as an aim to which businesses should orient their actions both for reasons of the good of avoiding the activities that contribute to the spilling of blood as well as for the good of sustainable economic enterprises, which are fostered by stable, peaceful relationships. Thus, business must do what it does best and address economic development, even in terms of the extraction of natural resources. But it must also be attentive to the rights of others, to the development of community and meaning, and to stop violence when it is likely. Given the dangers ecological stresses pose for the planet, it is hard to think of a more compelling reason to reorient business behavior.http://deepblue.lib.umich.edu/bitstream/2027.42/40084/3/wp698.pd

Adapting Corporate Governance for Sustainable Peace

In previous work, we argued that there is a link between corporate governance and the reduction of violence. In this manuscript, we further explore that link with a focus on how corporations can work toward the goal of reduction of violence in the societies in which they operate. Here, we pose the question of how well suited various corporate governance regimes are to face these complexities, and how they can do so in ways that are consistent with their fundamental principles. We focus on the corporate governance regimes of the United States, Germany and Japan. A common denominator of the political entities addressed is a commitment to a political regime of democracy. Section I outlines our thesis that corporations are in a position to make contributions to peace in society because of shifting political balances of power. It elaborates with the idea that our contemporary world has shifted from traditional balance of power conceptions in terms of the near universal embrace of parliamentary democracy requiring some reformulated description of the optimal relations among democracy, peace, and globalization. This section establishes the general parameters of the argument that democracy and peace are linked and that there are serious charges that globalization works against democracy and thereby threatens the sustainability of peace. Section II analyzes comparative models of corporate governance and considers the extent to which contemporary corporate governance models look to peace and workplace security as aims they should achieve. Concluding remarks follow in Section III.http://deepblue.lib.umich.edu/bitstream/2027.42/39917/3/wp532.pd

Gender Voice and Correlations with Peace

The statistics regarding violence in today’s society are staggering. A newly released study published by the World Health Organization, making headlines in the Wall Street Journal (Oct. 3, 2002) reports that “Violence Took 1.6 Million Lives in 2000.” Notably, this report considers only the data obtained from the seventy countries that report such statistics to the World Health Organization. It does not include reports from many countries whose violence is also high, such as Burundi, Rwanda, Iraq, Liberia and Afghanistan. This manuscript seeks to address some of these issues of violence by considering issues of gender. We pose the question whether there may be some correlation between violence and the lack meaningful involvement of women in the economy. If the countries that appear more violent are also countries where women are systematically excluded from business opportunities, perhaps one way to curb some of the societal violence would be to improve the opportunities for women in the economy. Multi-national corporations can play an important role in increasing these opportunities. As has been argued elsewhere, a reduction in poverty promotes stability and leads to a more peaceful society. Studies show that in developing countries, involving women in the economy as wage earners can reduce poverty. As the locus of production shifts away from the home, an initial decline in employment opportunities may occur. However, this eventually disappears and both women and men benefit.http://deepblue.lib.umich.edu/bitstream/2027.42/39915/3/wp530.pd

Doing Business in a Connected Society: The GSK Bribery Scandal in China

Focusing on the bribery scandal plaguing global healthcare giant GlaxoSmithKline LLC (GSK), this manuscript documents and offers proposals to redress the myriad of harms caused when multinational corporations (MNCs) accept bribery as an unspoken cost of doing business in connected societies Despite its history of being a connection-based society, Chinese culture does not condone commercial bribery. Recognizing this important distinction, we argue that bribery committed by MNCs is a threat, not only to China’s burgeoning market economy, but also to Chinese culture. Responding to this threat, and drawing on international anticorruption regimes, our manuscript outlines reforms that GSK and other MNCs might adopt in order to prevent their employees and directors from falling prey to unspoken rules of corruption.http://deepblue.lib.umich.edu/bitstream/2027.42/110784/1/1268_Schipani.pd

Pathways for Women to Obtain Positions of Organizational Leadership: The Significance of Mentoring and Networking

The Wall Street Journal, in interviews with top women executives, discussed their path to the top and the importance of mentoring in getting there. The response of Michelle Coleman Mayes was typical. She stressed the importance of having many mentors at different points in one's career, and to mentor others. The question, and positive responses of the executives, indicates the acceptance of the idea that mentoring is important, if not crucial, in helping women and minorities, to reach the top ranks in organizations. For at least two decades social research has confirmed what many have learned through experience. This article reviews the extant literature that addresses the ways in which mentoring and networking, both formal and informal, may help women executives achieve the highest levels of organizational leadership in business organizations, both national and international. In particular, the paper aims to identify those gaps of knowledge that, if bridged, would help companies better understand how to use mentoring and networking to develop women as leaders in multinational and multicultural business environments. The paper further seeks to identify the legal issues suggested by the mentoring and networking literature.http://deepblue.lib.umich.edu/bitstream/2027.42/61158/1/1117_CSchipani.pd

Fraud on the Market: Analysis of the Efficiency of the Corporate Bond Market

The efficiency of the corporate bond market is not well understood. Although many of the factors used to analyze stock market efficiency translate with some adjustments to corporate bond markets, the cause-effect factor is not intuitive and can be a source of significant confusion. In this manuscript we analyze bond market efficiency in the context of a recent court decision. In recent litigation concerning allegations of securities fraud perpetrated by the American International Group (AIG), the federal district court for the Southern District of New York declined to certify a class of bondholders, citing lack of common questions of law or fact. The decision turned on an empirical analysis of whether certain AIG bonds traded in an open, developed and efficient market. If the market for these bonds had been found efficient, there would have been grounds to certify the bondholders as a class. Ironically, the court found insufficient empirical evidence to hold that the $1.71 billion in AIG bonds, issued by the world’s largest insurance company, traded in efficient markets. Unfortunately, the AIG court missed salient differences between the stock and bond markets in reaching its conclusion. Our manuscript describes the analysis missed by the court and supports a contrary result. Part I provides an overview of the law as it has developed regarding certification of class actions and the elements of a claim of fraud on the market as relevant to the lead plaintiffs’ claims of violations of the securities laws. Part II introduces the required empirical analysis and benchmarks to evaluate a claim of fraud on the market. Part III continues with a theoretical discussion of the distinctions missing in the AIG analysis between bonds and stocks relevant to determining whether the bond market should be afforded the fraud on the market presumption. Part IV builds on this with a discussion of our alternate empirical analyses. Concluding remarks follow. The AIG decision has serious implications not only for the corporate bond market but also for public policy. Private securities fraud class actions are an important mechanism for deterring fraud and promoting confidence in the securities markets. When market efficiency is important for determining certification of a class of security holders, it is critical that courts carefully consider how different markets operate.http://deepblue.lib.umich.edu/bitstream/2027.42/85377/1/1158_Schipani.pd

The Plight of Women in Positions of Corporate Leadership in the United States, the European Union, and Japan: Differing Laws and Cultures, Similar Issues

Gender diversity in corporate governance is a highly debated issue worldwide. National campaigns such as “2020 Women on Boards” in the United States and “Women on the Board Pledge for Europe” are examples of just two initiatives aimed at increasing female representation in the corporate boardroom. Several European countries have adopted board quotas as a means toward achieving gender diversity. Japan has passed an Act on Promotion of Women’s Participation and Advancement in the Workplace to lay a foundation for establishing targets for promoting women. This paper examines the status of women in positions of leadership in the United States, several major countries in the European Union and Japan. We focus on the legal backdrop in each jurisdiction regarding gender discrimination and studies tending to demonstrate the economic benefits of gender diversity. We conclude that although important steps have been taken in the direction of narrowing the gender gap in all jurisdictions examined, progress has also been slow and difficult across the board. The issue of too few women at the top will not be resolved until there is a wider acceptance that female leaders can benefit their organizations and contribute to social and economic progress. Moreover, the presence of women on corporate boards is valuable in and of itself and the status quo ought to be further challenged in international business.https://deepblue.lib.umich.edu/bitstream/2027.42/152319/1/1396_Schipani.pd

A Half Century Post Title Vii: Still Seeking Pathways for Women to Organizational Leadership

Perhaps the most important of the many 50th anniversaries marked in 2014 is the passage of Title VII of the Civil Rights Act of 1964 (Title VII). Although Title VII and accompanying legislation and judicial rulings have made significant headway in improving the work environment for women, pathways for women to positions of leadership in organizations are still generally elusive. Our studies suggest additional challenges for women with dependents. In light of the overwhelming evidence that leadership opportunities are effectively denied to a large number of female citizens, it is time to reinterpret Title VII in a way to help remedy this type of discrimination. We thus advocate three proposals for reform. First, recognizing that quotas would be difficult to implement in the United States, we argue that in cases alleging gender discrimination, courts consider the paucity of women in leadership positions as a rebuttable presumption of discrimination – as a logical extension to the disparate impact analysis firmly established in precedent. Second, we implore the SEC to define diversity, in reports already required of public companies, to include gender diversity. Finally, we urge firms to improve programs for mentoring and networking to provide true opportunities across cultural backgrounds to break the logjam in the pathway for women seeking upward mobility.http://deepblue.lib.umich.edu/bitstream/2027.42/111742/1/1278_Schipani.pd