Opportunities and obstacles of company governance in China

China offers opportunities and obstacles, says Heidi Dugan MAICD, who helps businesses navigate this complex landscape.

She is founding director of Arete Group and a University of Southern Queensland councillor, but Heidi Dugan is also a TV host who has carved out an enviable career in business, advising international companies and executives on trade, market strategies, media and the foreign work culture in China. The fluent Chinese speaker was elected chair of the Australian Chamber of Commerce in Shanghai (AustCham Shanghai) in 2019.

What motivated you to move to China?

I moved here 29 years ago. Time flies. I studied international trade in Wuhan and then came to Shanghai and never left. I was working in real estate, then got a job at a TV station, preparing Chinese hosts for the English news. Then I became the first foreign TV host in China. I have had my own cult show, You Are the Chef, for over 20 years. It airs three times a day to more than six million viewers. I have a large following on social media and talk to them about food, lifestyle and travel.

Through that TV show, I got to know a lot of the brands, companies and hotels — and all the international brands coming into China. Many asked me about the Chinese market, so I started consulting, doing a lot of senior leadership strategy. When a company came into the market, they would have their international managers or CEOs talk to me. In China, it’s about localising — understanding the local market.

Because I work with so many businesses, the Queensland government last year appointed me a global connector for Queensland. Now I’m doing a lot of work representing the voice of Queensland to Chinese consumers, students and travellers, including events with the Minister for Trade, Finance, Employment and Training.

How did you settle into life in China, personally and professionally?

China was a really different place 29 years ago. I was single and hungry to look at different opportunities in work and jobs — and I loved the fast pace. Shanghai is an international city comparable to some of the biggest and best cities in the world. I love getting that exposure to people from all over the world. I’ve learned so much from that, especially communicating and understanding different people and cultures. When you live in another country, you have to be good at communicating and reading people.

Through AustCham Shanghai, I work closely with the Chinese government, the Australian Department of Foreign Affairs and Trade, and our members to strengthen business relationships to ensure strong trade in the future. When you’re working with so many different types of people, you need the ability to pull all the pieces together to reach that one goal. People who live internationally are often more equipped to do that — to be bigger thinkers. You become quite fearless with your goal setting and plans.

What’s it like to live and work in Shanghai?

It is fast-paced. People make decisions very quickly, which is often a challenge for international businesses that need time. You really need to know what your end goal is, because everything is fluid.

In Australia, whether it’s for lifestyle or business, you set the goal, then the plan and follow it. In China, you’ve got to have the end in sight, but how you get there can and should be really flexible. So much changes and very quickly, so you need to be able to make decisions swiftly.

What are the key differences between governing a company in Australia and one in China?

Anyone considering being a director in China needs to be highly cautious, because the responsibilities and regulations are often stricter. One interesting difference is that as well as directors, Chinese companies have a legal representative responsible for almost everything.

You also need to be very aware when taking a board position with Chinese businesses. For instance, your Australian business might do a partnership or merger with a Chinese one. Next thing you know, one of your directors or the CEO has to take a position on their board. You have to know exactly what you’re getting into. I’d suggest if you’re taking a role like that, you actually live in the country. As an outsider, you won’t know what is happening with the business and it’s very difficult to remove yourself if things don’t go to plan.

What are the biggest shifts in governance currently affecting businesses in China?

From a legal point of view, one of the challenges any company has is that the regulations change frequently. You need to have someone on the board — or advising the board — who is across all those regulatory changes.

One of the biggest changes we’ve seen over the past six months concerns NGOs and charities. The regulation has always been there, but now it’s being enforced. A lot of charities had been set up under other business models, then there was a big crackdown, which continues.

Some businesses are operating under a normal business licence, which was fine in the past because they perhaps had only a slightly different type of business in China. The problem now is that the Chinese government is looking to their core business in their home country and asking, “What type of business are you doing there?”

If you are a charity or NGO, and you are already in — or coming into — the Chinese market, but running a business that is different and making money, they will crack down on you heavily.

Being up to date with these regulations means we can inform our AustCham Shanghai members about those market and regulatory changes.

How are foreign businesses seeing the Chinese market post-COVID?

Over the past few years, people have seen the market dip. China was on such an upward spiral; the economy was rapidly changing and going so well. Now it has settled a bit, although it’s still one of the fastest-growing countries in the world.

It’s an incredible place for business opportunities and this year I’ve seen companies and brands coming back into the market. I highly encourage people to look into China. But it’s not an “if I just reach one per cent of the people, I’ll be fine” scenario. That one per cent of the population is not easy to grab. You have to be savvy and have a proper business plan — as well as people on the ground who can support and help you.

This article first appeared under the headline 'Directors abroad’ in the May 2025 issue of Company Director magazine.