The supervisory board is unable to monitor the board of directors and managers,
and is generally incapable of identifying and addressing inside corruption. It is just a
rubber stamp. Compared with their western counterparts, managers of Chinese-listed
companies get little cash compensation and stock ownership. There are generally no
effective incentive arrangements for managers of listed companies. Furthermore, the
managerial labor market is not well established in China. The outside control market,
such mergers and acquisitions, typically does not affect the job security of the
managers.