The corporate governance law inChinais developed and finalized by the National People’s Congress (NPC) along with its Standing Committee. The memorandum of associations plays a vital role in the law as to be produced by every company. The corporations according to the law are supposed to have three governing bodies in the business; shareholders, board of directors and board of supervisors. Appointing a chairperson and a chief executive officer (CEO) isessential as per the law.
A simple look at the corporate law of China portrays it as a system with two-tiers whereas, the board of directors and supervisors are independent bodies and none has a hierarchical right over the other and the two bodies are elected by the shareholders that are the most important governing body for any corporation. The corporate governance law ofChinaaccepts only two forms of corporations, namely; public corporation and closely held corporation. The two categories havefurther divisions in structures as well. The economic effects of the corporate governance in China in an interesting analysis of the good and bad effects on the law on the economy of China.
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