| The system of employee representation committee (ERC) which is composed of the representatives of employees is a traditional part of Chinese employee participation system. With the establishment of market economy system and the reform of corporate governance, the role of ERC has become less important and its function has been weaker, which gives rise to the issue of reconsidering the legitimacy of ERC in modern enterprises. The theories of Unternehmen an sich, corporate social responsibility, corporate stakeholders, human capital and economic democracy justify the system of employee participation as well as the existence of ERC in Chinese enterprises from different perspectives. In addition, the ERC has positive role in enhancing the communications between employees and managements, strengthening oversight of executives and lessening the subordination of employees, which will help to improve the corporate governance structure and safeguard the corporate interests. Thus the ERC should continue to exist in the new context of market economy with the diversity of corporate ownership.China should integrate the traditional ERC system into the modern corporate governance structure by changing the rules related to the creation and power of ERC, and balance the roles and functions between ERC and other players, including shareholders, board of directors and board of supervisors. The new rules should ensure the ERC to serve as the main platform of consultations between employees and employers, by playing the role of consultation, oversight, etc, in the new context. |
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