The corporate governance code inUKcovers all entities including shareholders and it focuses on having a strong and effective board that takes objective decisions overall. The code focuses on accountability, remuneration and effectiveness of the board. The paper shall focus on comparing the corporate governance codes of the two countries and the way the difference in codes will effect the company’s operations and profitability (Liu, Qiao, Joe Lu, 2004). Corporate Governance inChinahas taken a new face afterChina’s accession to WTO and corporate law is a major aspect in the WTO reforms that have yielded major institutional changes in China from being a planned economy to a market economy (Zhang Weiying,1999).
The directors have to objective in their decision making and overall transparency in operations is essential. Sharholders have premium rights and extensive consultation in all matters is deemed most important. Therefore, the UK code aims to develop the organization and imposing competitive pressures to prepare the company in the face of the new challenges. The motive of the UK code is to develop and ensure extreme growth of organizations under the code (Financial Reporting Council, 2006).
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