chapter  7
36 Pages

Directors’ duties and liabilities in China: enforcement difficulties in protecting investors and other corporate stakeholders

As discussed in the previous chapter, China has made great progress in developing its securities market and improving the corporate governance of listed companies and SOEs since the 1990s. However, significant regulatory problems remain and enforcement has been a difficult challenge for both the regulators and China’s politically weak judicial institutions.1 For example, misleading or deceptive information disclosure by listed companies has been a widespread problem,2 but companies and directors are not sufficiently punished for their misconduct, which in turn makes it difficult to rein in malpractice.