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Friday, December 10, 2004

Corporate governance in China

In my undergraduate lecture course on American business history, I often take a few minutes at the beginning of class to talk about stories in the news recently. Most of those are stories in the New York Times simply because I read it before the Wall Street Journal every morning and some days I don't get to the WSJ until the evening. So today's "harvest" marks a change of sorts: the interesting news seems mainly to come from the Journal.

Case in point: In the "World Watch" column (WSJ, 12/09/04, A14), a brief report entitled "China Gives Minority Shareholders Bigger Role" from Dow Jones Newswires. Unfortunately, it's a tad opaque (incoherent?), so I will have to dig up more/better information elsewhere. But the gist of it is that the Chinese government is limiting the governance power of government investors, who hold "nontradable shares accounting for two-thirds of the value of the average listed company in China," thus enhancing the power of private shareholders. But, interestingly, shareholders cannot vote by proxy--they must actually attend shareholder meetings in order to vote. Here's where the murkiness enters in: it is unclear in the report whether the new regulations establish this practice or encourage companies to permit voting by proxy.

I'll dig up more info on this when I have chance. But first I have to tackle a pile of student paper drafts that need grading. Good task for a dark and wet afternoon in the Upper Midwest. I have my fingers crossed that we'll finally get a few flakes of snow.

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