Governance and performance in compliance versus non-compliance Chinese listed companies

compared the key governance characteristics of Chinese PLCs that were found to have contravened regulatory compliance requirements (i.e., 'non-compliance' PLCs) to those that were not (i.e., 'compliance' PLCs). Based on a comparison between 53 pairs of compliance- and non-compliance-PLCs over the period from 2001 to 2006, results show that there are significant differences between the two. They found that ownership concentration is higher in compliance firms that also compensate their directors and executives at higher levels. Furthermore, the results suggest that sound governance practices benefit firms socially and financially, and an effective internal monitoring mechanism can further differentiate good companies from bad companies such that the good companies perform better.