Tracing back to the source: Understanding the corporate governance of boards of directors in Chinese SOEs

Based on the relevant theories of corporate governance and the special institutional background of Chinese state-owned enterprises(SOEs),this paper systematically reviews the literature on the independence and governance effect of SOE boards.We find that the governance effect of SOE boards is driven by the dual characteristics of SOEs:state involvement in ownership and market incentives.With the state involved in ownership,SOEs adhere to the leadership of the Communist Party of China(CPC),which results in an enhanced governance effect.Under market incentives,SOEs tend to have an optimal board structure that helps mitigate both the shareholder–management agency problem(Type I agency problem)and the controlling shareholder–minority shareholder agency problem(Type II agency problem).In terms of the governance effect of boards,directors appointed by non-controlling shareholders are effective in alleviating Type I and Type II agency problems,and this highlights the importance of mixed-ownership reforms in SOEs.Independent directors,especially those with a professional background,also play a role in improving corporate governance.However,independent directors in SOEs have relatively weak incentives to monitor,which limits their governance effect.This paper shows positive implications for promoting mixed-ownership reforms and improving board governance in SOEs.

The Social Governance Community in Transforming Neighborhoods:A Spatial Reconstruction Perspective

The strategies of rapid urbanization and rural revitalization have fostered the emergence of transforming neighborhoods. Using a framework integrating multiple spatial attributes that embeds the administrative nature of space in its social nature and raises the level of its governance, this paper provides theoretical generalizations for the social governance communities of transforming neighborhoods on the basis of a typology that divides them into four types: social governance communities of individually constructed neighborhoods, social governance communities in post-demolition constructed neighborhoods, social governance communities in immigrant constructed neighborhoods, and social governance communities in collectively constructed neighborhoods. Social governance communities of transforming neighborhoods emerge in the course of spatial reconstruction and redevelopment of production. At the stage of space reconstruction, the administrative nature of space plays its part in developing differentiated spatial governance features, while the social nature of space takes effect through the establishment of four types of social governance community social networks: the loosely connected network, the multiple components network, the close interest network and the highly associated network. At the stage of space production, the social nature of space is embedded in governance and takes effect through the integration of top-down administrative control and bottom-up resident autonomy. Consequently, we see the generation of four governance strategies of administration that adjust the autonomy of social governance communities: 'control-superficial governance,' 'guidance-deliberative governance,' 'support-collaborative governance,' and 'leading-governance by the people.' In terms of theory, this study conducts a theoretical dialogue with the existing 'controlled autonomy' and 'autonomy with administrative elimination,' and in terms of practice, it has implications for strengthening popular rule by neighborhood social governance communities and filling the ability gap in such communities.

The Logical Transformation of the Modernization of State Governance

The modernization of state governance embodies the process of modern state construction,and the success or failure of state governance depends on the institutional logic and effectiveness of state governance.The governance of modern Western countries is dominated by market logic and has made outstanding achievements in protecting individual rights and increasing material wealth.However,it faces a crisis of declining governance effectiveness.Since the Opium War,China’s governance transformation has been deeply restricted by the traditional power-based logic and success has been hard.Since the founding of the People’s Republic of China,especially since the reform and opening up,there has been a gradual shift from a power-based approach to a rights-based approach in state governance,which has achieved outstanding governance results.In view of the new changes in time and space,the modernization of state governance in the new era needs to deal with the dual tests of traditional factors and international situation.Therefore,the core issues of the transformation of state governance should be analyzed from an open-system perspective,and the logic of state governance should be effectively settled on the rights-based approach.In contemporary China,the most important thing in the modernization of state governance is to uphold the Party’s leadership.From the perspective of practical issues and objective needs,the modernization of state governance must adhere to the people-centered principle,establish the foundation of governance by civil rights,build governance consensus through constitutional governance,create governance momentum through cooperative actions,and provide governance support through public virtues.This establishes and consolidates the base of the effectiveness of modern state governance and enhances its efficiency.

External regulation, independent director attendance,and governance effects

In this study we examine how the regulation of director attendance disciplines directors’behavior,and consider the governance effect of such regulations.This examination exploits the differences between the requirements for director attendance at board meetings enacted by the Shanghai Stock Exchange(SHSE)and by the Shenzhen Stock Exchange(SZSE).Using a difference-indifferences model with a sample of A-share listed firms from 2006 to 2017,we document that the rate of meeting attendance by independent directors who serve with firms listed on the SHSE(SHIDs)has increased significantly since the exchange’s enforcement of the regulation on attendance.This positive effect has been more pronounced for independent directors with legal backgrounds.Further investigations find that the regulation of attendance plays a corporate governance role through the mechanism of enhanced monitoring.The attendance regulation increases the SHIDs likelihood of casting dissenting votes,and it leads to both better accounting performance and higher firm value.In addition,SHIDs are more likely to depart from firms listed on the SHSE,and to transfer their directorships to firms listed on the SZSE,which has a less constraining attendance requirement.Our findings provide evidence of how external regulation shapes director attendance and voting behavior in emerging markets.

Building Communication Capacity for Good Governance： A Multi-leveled Analysis

This paper stresses the role of media and communication in promoting good governance by presenting a multi-leveled analytical approach to issues and cases both nationally and internationally. The study draws policy implications for the Chinese government as regards to integrating building communication capacity into governance agenda. Even though there is a growing attention on implementing communication programs into policies, the study on the role of the media and communication in governance has not been dearly conceptualized. This 15aper analyses the role of media and communication in promoting good governance from the levels of state governments, civil society and the general public, respectively. It argues that strong communication capacity at the governmental level increases governance effectiveness through helping to build consensus in policy-making and promote development policies; strong communication capacity of the civil society expands the development results when the NGOs work together with the mass media to promote their activities and prioritize development goals through media＇s agenda-setting and framing functions; and strong communication capacity strengthens the voice of the public and empower them to hold the government account through the media＇s watch-dog role. The paper concludes that improving communication capacity is essential to achieve good governance for the Chinese government.

A new broom sweeps clean:is there a Chinese-style political business cycle?

Politics is an important cause of economic growth and fluctuations.We present a new Political Business Cycle(PBC)Theory based on the background of recent Chinese economic transformation and government behaviors,explore the economic impact of the National Congress of the Communist Party of China(CPC),the National People’s Congress(NPC)and Chinese People’s Political Consultive Conference(CPPCC)and how they shape and influence the behaviors of local government officials.Based on 1994-2012 inter-provincial panel data of China and using SYS-GMM and LSDVC,we find that there are significant effects in China of PBC and government administration change.Changes in government administration influence the economic behaviors of local governments,which in turn influence local economic development through fiscal decentralization and political promotion tournament.These effects are sustained and robust.In this paper we offer an economic explanation for the Chinese proverb“a new broom sweeps clean,”and try to verify the Chinese-style Political Business Cycle(CPBC).We provide new ideas for further improving the functions of government,optimizing macroeconomic control,and preventing personnel changes in the government from overheating the economy.