Corporate Governance Reforms in China and India: Challenges and Opportunities Case Solution

In this article, the evolution of corporate governance reforms in the emerging economies of China and India are analyzed. The two main driving forces behind governance reforms in these countries, privatization and globalization are described first. After summarizing the evolution of governance reforms in each context, we identified four main barriers for application in the two countries, namely: (1) lack of incentives, (2) power of the dominant shareholder, (3) underdeveloped external monitoring systems, and (4) the shortage of qualified independent directors. Below we highlight the practical implications of these governance problems for foreign companies considering or already involved in significant investments in these emerging economies. We emphasize that foreign companies are sensitive to the specific challenges of context are more likely to implement the contractual or other guarantees, and to identify more concrete and meaningful participation in the governance of their companies forms. Finally, we conclude with some implications for future research.
by
Nandini Rajagopalan,
Zhang Yan
Source: Business Horizons
10 pages.
Publication Date: January 1, 2008. Prod #: BH264-PDF-ENG
Reforms in governance in China and India: Challenges and Opportunities Case Solution

Corporate Governance Reforms in China and India: Challenges and Opportunities Case Solution
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