China’s State-Owned Enterprises (SOEs) have been traditionally governed by the Communist Party. Privatization has brought greater numbers of investors who have a stake and demand a voice in how SOEs are managed. Three traditional governance perspectives are agency theory, resource dependence, and institutional theory, but China’s transition introduces several additional governance approaches. Are “capitalism with Chinese characteristics” and “bureaucratic entrepreneurialism” paradoxes? Based on initial interviews of SOE executives, a survey of top managers and board chairs of SOEs ( including some listed companies), and subsequent interviews and observations in select case companies, this paper develops a taxonomy of SOE governance that now exists in China. Two of the approaches represent the extremes of the old and new leadership. Considering China’s historical and cultural contexts coupled with its current stage of economic transition, two additional approaches to corporate governance are to have neither the old nor new dominate or, in unique contrast to other countries, a hybrid of both. A final approach would be to strive toward international standards.
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