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In recent years, scholars have begun to devote significant attention to the systematic examination of Chinese corporate governance given China’s tremendous economic growth and development of capital markets (Allen et al., 2005; Conyon and He, 2011; Hu et al., 2010; Peng et al., 2003, 2010). Executive pay is a significant corporate governance issue. The optimal design of compensation contracts helps resolve agency costs associated with the separation of firm ownership from its control. There are several important questions to address. Are Chinese executives paid in the same way as western executives, given China’s limited experience with stock markets and governance reform? Are the drivers of executive pay, such as firm performance and size, as important in China as in the west? How does the Chinese state affect the provision of incentives in Chinese firms? These questions are, of course, located in the broader question of whether executive pay will globalize along American lines (Cheffins, 2003).

The incidence rate of strategic alliances has accelerated in recent decades, and alliances have become one of the most important entry modes into foreign markets (Hergert and Morris, 1988; Glaister and Buckley, 1996; Nielsen, 2007). Earlier studies show that multinationals use alliances to enter the markets of countries that enforce restrictive conditions on foreign investments (Hood and Young, 1979). Later research shows an increase in firms voluntarily entering into alliances in response to changing, unpredictable, globalized competition. By participating in cooperative ventures, multinationals stabilize the flow of needed resources, smooth global operations and increase the speed at which they can enter new markets (Lavie and Miller, 2008). The fewer resource commitments required in alliances further allow firms to more flexibly hedge uncertainty in overseas investments, compared with alternative entry modes, such as mergers and acquisitions and wholly owned greenfields (Brouthers, Brouthers, and Werner, 2008). However, despite the purported advantages underlying alliances, empirical evidence shows that there are as many enterprises that succeed in their alliance engagements as those that fail to do so (e.g., Das, Sen and Sengupta, 1998; Ren, Gray and Kim, 2009). The presence of a mixture of outcomes suggests that realization of the purported advantages of alliances depends on how the associated costs are controlled.

The corporate governance practices of large Japanese enterprises were a focus of controversy during and after the rapid rise of these enterprises to international prominence in the 1980s. The perception of Japanese governance mechanisms at that time stands out as the antipodal opposite of the current thrust for the ‘global’ standards. The popular view at the height of Japan’s economic power was that top executives in Japan, with no distracting interventions from pesky shareholders, exercised their discretion to target long-term efficiency-enhancing goals, to the profit of employees, shareholders, and other stakeholders. According to this view, the agency costs of managerial autonomy should be adequately compensated by the knowledge capital accumulated in and utilized by salaried management. In the US, on the other hand — according to the conventional view at the time — shareholders pressured salaried managers to maximize short-term returns at the expense of their firms’ economic health, thus ultimately harming the competitiveness of US industry in the 1980s.

The mutual fund market has grown so much over the last decade that we now have a real need for a criterion to evaluate portfolio managers. The mutual fund environment is characterized by asymmetric information, which makes analysing performance difficult, and promotes conflicts of interests about the use of market signals and control mechanisms to minimize agency costs.

For a long time, the literature on corporate governance has been dominated by analyses of the relations between shareholders and management and was concerned with very restrictive issues, such as the way shareholders could monitor management to act in their interests. However, recent studies have increasingly adopted a broader view. In this new perspective, corporate organization is not only determined by an efficiency logic (minimization of transaction or agency costs) but also by institutional factors (Jackson, 2001). Corporate governance is thus embedded in national institutions and can be broadly defined as the interactions between the central actors of companies (owners, managers, and workers), codified in some regulatory framework (company law, financial market regulations, and labor law) produced by the state or by collective actors.