The corporate governance code ofUKis clearly more development oriented and it does not restrict the entry of new organizations or even the foreign entities yet the competitive pressures it poses on organizations force them to grow and meet the challenges of the new era which automatically wipes out the inefficient entities. The Chinese code of corporate governance is more of a controlling model that focuses on everything being under control of the state which in turn restricts entry of new entities whether local or foreign.
The Chinese code does not encourage foreign investment and the code needs to be updated in order to meet the new challenges of the century (McKinsey & Company, 2002). The board of directors, remuneration, accountability and objective decision making are key aspects of theUKcode of corporate governance whereas, the Chinese code focuses on the shareholders as a major aspect and the controlling interest of the state in every organization. The Chinese code does not preach growth and development yet the economy is growing due to the other major advantages that no other country is able to provide. TheUKcode is developed with a major objective of having the code help the organizations to meet the challenges of the changing dynamics and circumstances. UnlikeUK, the Chinese code is applicable only in the case of a planned or state owned economy so it does not equip organizations to meed the changing circumstances and the challenges of the new century (Clarke, 2003, pp. 494-507).
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