A Road Map for Corporate Governance in East Asia

Low, Chee Keong | January 1, 2004

Much has transpired since the inadequacies of corporate governance practices in East Asia were glaringly exposed by the Asian financial crisis. The crisis brought to the foreground numerous deficiencies, which had common roots in excessive over-leverage as well as the lack of transparency, disclosure and accountability. These issues have been explicitly recognized with the release of the White Paper on Corporate Governance in Asia by the Asian Roundtable on Corporate Governance in June 2003.

By responding in part to the White Paper, this article sets out a “roadmap” whose ultimate objective is the enhancement of the practice of corporate governance in three jurisdictions, namely Hong Kong , Malaysia and Singapore . These countries are selected as proxies for the region with the choice premised upon their common legal framework, which emphasizes the rule of law, the liquidity of their capital markets and the high mobility of capital without the imposition of any controls. By setting up a roadmap couched in broad principles as regards the roles and duties of directors, shareholders and regulators, this paper seeks to provide some ideas that have the distinct advantage of adaptability across jurisdictions thereby transcending the cultural divide of the East Asian region.