ABSTRACT

The enormous influence of politics and socialist ideology could help in understanding the corporate objective in China. Along with the problems under the shareholder model, as well as the potential advantage of the stakeholder model, this chapter takes China's unique national situation into account by analysing the lessons from historic experience. The chapter considers the role of the working class and corporate social and political responsibilities as stakeholding factors. To begin with, employees, a vital stakeholder group in the Western corporate governance system, have an even more superior position in China. Fortunately, it is not impossible to modify the current shareholder-centred inclination to a broader objective by including all stakeholders' benefits. If individual stakeholders have a straightforward route to enforcing directors' duties, directors may end up by only prioritising the interests of activists. Shareholder wealth maximisation (SWM) or say the shareholder model is, as a result, regarded by people as a huge improvement over the original government-centred model.