Heidrick & Struggles International, Inc. (Nasdaq: HSII), the world's premier executive search and leadership consulting firm, has sponsored a Benchmarking Corporate Governance in China study based on 15 months of research conducted by Fudan University in Shanghai. Recommendations from the study include a call for Chinese companies to recruit and value the opinions of independent directors.
The study found that, as in Chinese society, patriarchy -- especially in private enterprises -- prevails. The tendency toward having a "weak board and strong chairman" is common, and boards tend to be tight-knit groups built on business or personal networks. Independent directors are mostly brought in to fulfill legal requirements and are limited to advisory roles. Other key findings about boards in China include:
-- Only 50 percent are evaluated.
-- Their power to influence stakeholder interests is limited.
-- They have limited influence on CEO selection, particularly since a high
percentage of chairmen are also the CEO of the company.
-- Except in private enterprises, they have little influence on daily
operational matters.
-- Native Chinese companies are still resistant to electing foreigners to
their boards.
See full Press Release.
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