Employee Participation in Corporate Governance in China: A Focus on the New Company Law

Yuanyuan Xu

GBP Proceedings Series, 2025, vol. 16, 80-86

Abstract: As China enters a new era of socialism with Chinese characteristics, corporate governance has become a focal point of both academic and practical attention. The traditional governance model, which prioritizes the maximization of shareholder interests, increasingly reveals its limitations in addressing the diverse needs of modern enterprises. In response, the Company Law of the People's Republic of China was revised in 2023, mandating the establishment of a democratic management system in which workers' congresses serve as a core institutional mechanism. This legal reform provides new pathways for employee participation in corporate governance, aiming to enhance organizational decision-making, promote equitable consideration of stakeholder interests, and strengthen internal supervision mechanisms. Under the new framework, employee participation is not merely symbolic but is designed to influence critical corporate decisions, including operational planning, financial management, and strategic development. This paper systematically analyzes the provisions of the revised Company Law, examining the necessity of employee participation, the design of relevant rules, existing implementation challenges, and potential avenues for improvement. By integrating theoretical insights with practical considerations, the study seeks to offer a comprehensive reference for constructing a multi-stakeholder corporate governance system that balances the interests of shareholders, employees, and other key stakeholders, thereby promoting sustainable and inclusive corporate development.

Keywords: employee participation; corporate governance; New Company Law (search for similar items in EconPapers)
Date: 2025
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