What Matters in the Governance of the Board? - A Comparative Perspective

The board of directors is the critical link between ownership and management of companies. The governance of the board is at the centre of corporate governance in the United States and US boards are largely held to be effective. What makes a good board? Board independence, board activism, directors' quality and appropriate stock ownership and remuneration of directors. This article looks at principles adopted by BusinessWeek to rank best and worst boards in the United States. It then examines governance quality and problems in Chinese boards against the benchmark of the best US boards. It concludes that board independence and accountability are two key areas to be addressed to improve the governance of Chinese boards. Some recommendations are provided