Corporate Governance in Asia’s Emerging Markets – an Overview

Corporate Governance (CG) has been viewed by many in the Western world as a particularly Western concept and mechanism. Current expectations by executive management groups of their Board run the gamut of sober second thought and conservative oversight focused on compliance issues, through involvement in strategy development and direction, to daily consultation on operational strategy implementation. The challenge along all points of this spectrum is the balance between independence and discipline on the one hand and self-interests of the Board members in the overall success of the corporation, from both a financial and an ego perspective. This article outlines key findings resulting from focused interviews and in-depth reviews of research related to the practice of corporate governance in Asia. Interviews were conducted in Hong Kong (6) and Malaysia (12) and focused on CG in those two countries. The goal was to establish areas of consistency or divergence from findings in the interviews. Findings indicate that CG continues to struggle in areas of transparency and limited independence of Board members. Increased legislation in the focal countries studied (Malaysia and Hong Kong) has helped, but progress has been slow.