Corporate Governance in China: Research and Evaluation

CHAPTER 8

The Appraisal and Index Research of Stakeholder Governance: Evidence from China's Listed Companies

Stakeholder governance has been one of the key components in the corporate governance research framework. The stakeholder governance should be included in an integral corporate governance evaluation system, which aims to demonstrate an objective and comprehensive corporate governance status. Based on the above reasoning, stakeholder governance should not be neglected by any company seeking better and sound performance.

The index of stakeholder governance

Introduction

In the early 1980s, from the angle of company strategic management and business ethics, stakeholders have been firstly and comprehensively explored by some economists and management scholars, represented by Freeman (Freeman and Redd, 1983). Blair (1995) argues that an organization holds social responsibility and exists to create wealth for the whole society, so the key points for corporate governance are based on the fact that the management should be liberated from the pressure of the shareholders and transfer more rights to other stakeholders. However, the dominant position of the stakeholder is also highlighted by the Hampel Report (1998), the OECD Principles of Corporate Governance launched in June 1999, and the U.S. Business Roundtable. For simplicity, the China Corporate Governance Principles, drawn by the CSRC and the SETC in 2002, outlined in detail the definition of stakeholders, the stakeholder position ...