Abstract

This paper delineates the development of corporate governance practices in China from four perspectives: historical evolution, current progresses, existing issues, and future direction. Firstly, we provide an indepth analysis of the progression of corporate governance in China, from the introduction of corporate governance concepts at the early stage of opening-up and economic reform in 1978, through the development of incorporation structures and governance mechanisms, to the enhancement of effectiveness at the present. This demonstrates that the development of corporate governance in China has undergone significant changes and has gradually formed a governance system adapted to the requirements of the socialist market economy. Secondly, we outline the outcomes of market reforms in shareholder governance, mixed-ownership experiment, board governance, quality of information disclosure, and sustainable development. We also explore internal issues such as the effectiveness of independent director system, dividend payout policies, and ESG disclosures, as well as the external challenges including oversight role by institutional investors, banks and other financial institutions, and the efficacy of market intermediaries. Lastly, we propose future directions for deepening corporate governance reforms, i.e., strengthening information disclosure and new governance models under the digital economy in China. These measures aim to promote the advancement of Chinese corporate governance towards greater efficiency, transparency, internationalization, and digitalization.

Keywords:Corporate governance; Regulatory compliance; Equity structure reform; Information disclosure; ESG performance; Digital transformation