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Experts Investigate Important Corporate Governance Issues in China
and Asia
¡@¡@The three-day Conference convened top scholars in the area of corporate governance from the East and the West to discuss important corporate governance issues of China and Asia. Speakers are all experts from renowned institutions such as the Yale University, University of Southern California, the University of Alberta, the University of North Carolina - Chapel Hill and World Bank. ¡@¡@Professor Wong Tak Jun, Director of the CUHK's Center for Institutions and Governance, Chair Professor of Accountancy and Associate Dean of Research at the Faculty of Business Administration, believed that the conference will facilitate interactions among industry participants, "We are pleased to organize this international conference to bring in top scholars and industry experts to explore and evaluate crucial corporate governance issues in China and Asia. Topics to be discussed are all of timely relevance such as property rights protection and corporate governance; public sector governance and corporate governance; the roles of corporate governance in corporate finance and economic development; accounting disclosure, earning management, and corporate transparency issues; the roles of information intermediaries in corporate governance and the roles of institutional investors in corporate governance." ¡@¡@"This is actually one of the key initiatives from our Center. The Center is set up to promote high quality research and education on corporate governance issues in Asia and China, and it has actively sponsored activities that help build the needed infrastructures for high quality research; providing a platform for scholarly exchanges of research results, and knowledge transfer between researchers and business communities." ¡@¡@The Center has published numerous research papers in leading international journals such as the International Review of Finance, the Journal of Accounting and Economics, the Journal of Accounting Research and the Journal of Corporate Finance. It also sponsors numerous ongoing research projects such as family firm succession in Asia, the market for auditors in China, the emergence of hierarchical organizational structure of Chinese business groups, political connections and the governance and performance of Chinese firms. ¡@¡@One of the studies recently completed by the Center on political connections and firm performance of Chinese listed firms was presented at the American Finance Association annual meeting on 7 January 2005. Titled "Politically-connected CEOs, Corporate Governance and Post-IPO Performance of China's Partially Privatized Firms", the study reports that 28% of the CEOs in the sample of 617 mainland listed firms have political connections, either having served or currently serving as government bureaucrats. Co-authored by Prof. Wong and Professor Joseph Fan, Deputy Director of the Center, the study suggests that the political connection of the CEOs seems to hurt rather than help firm performance. It also finds that mainland IPO firms are poor performers in the stock market and firms with politically-connected CEOs perform even worse. The three-year post-IPO stock returns of the sample underperform the market by 23%, and the underperformance of firms with such politically-connected CEOs exceeds those without politically-connected CEOs by 37%. ¡@¡@The study provides a clue why firms with politically-connected CEOs perform worse after the IPO. A detailed analysis of the board composition at the IPO shows that firms with politically-connected CEOs are more likely to appoint other bureaucrats to the management teams and boards of directors, while they appoint fewer directors with relevant professional background or prior business experience, nor any representative of minority shareholders. Overall, the results of the study indicate that the appointment of politically-connected CEOs does not enhance firm efficiency but rather fulfill political goals of politicians. ¡@¡@Prof. Wong said, "This kind of high quality research will draw together experts from the fields of accounting, economics and finance to address how Asia's various institutional environments shape the governance and economic behaviors of corporations and their agents."
For details of the "International Conference on Corporate Governance in China and Asia", please visit: http://www.baf.cuhk.edu.hk/research/cig/events_program.htm |