Corporate Governance

2077-6535 (online)
2077-6527 (print)
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This series of books addresses issues related to corporate governance including such issues as board composition and nomination, the role of institutional investors, board incentives, risk management and  supervision and enforcement.

Also available in French
Corporate Governance in Asia 2011

Corporate Governance in Asia 2011

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10 Mar 2011
9789264096790 (PDF) ;9789264096783(print)

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In 2003, the Asian Roundtable on Corporate Governance produced recommendations to improve corporate governance in Asia, based on the OECD Principles of Corporate Governance. This report summarises the results of a stocktaking exercise to determine progress made to date and the challenges remaining in the implementation of these recommendations. Included in this book are valuable insights into corporate governance rules and practices of listed companies in Asia, notably: shareholder rights, the protection of non-controlling owners, transparency and disclosure, as well as the role of company boards.

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  • Foreword
    In 2003, the Asian Roundtable on Corporate Governance ("Asian Roundtable") agreed on a White Paper on Corporate Governance in Asia ("2003 White Paper"), using the OECD Principles of Corporate Governance as a reference. The 2003 White Paper includes six priorities for corporate governance reform and 36 specific recommendations to improve corporate governance.
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    • Overall progress since 2005
      All jurisdictions surveyed reported updates to laws, regulations, and guidelines, listing requirements and corporate governance codes in the period surveyed. The developments were too numerous to be listed, and are highlighted in the respective recommendations.
    • Obstacles to implementation
      The lack of understanding of a number of concepts such as "material transactions", "independent board member", "fiduciary duty" and "related parties" was noted as a major obstacle for the effective implementation of these concepts.
    • Outstanding issues
      Respondents brought up the issue of how to strike the right balance between having a system incorporating key aspects of good governance practices into legislation, while also maintaining flexibility and not being overly prescriptive. This is in essence addressing the basic question whether a system of governance should be based on either rules – mandated standards – or principles – general guidelines. A system of principles-backed rules might be emerging, thereby merging the two approaches.
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  • Expand / Collapse Hide / Show all Abstracts Taking Stock of Corporate Governance in Asia

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    • Shareholders' rights and the equitable treatment of shareholders
      The recommendation was issued with practices such as coordinated shareholder meetings on the same day; short notice periods for Annual General Meetings; and generally inadequate information policy leading up to meetings in mind. In addition, the use of company officers to ensure the integrity of meetings as well as facilitating the use of proxy and absentia voting was encouraged.
    • The role of stakeholders in corporate governance
      While adopting some of the more advanced aspects of developed market insolvency regimes, a number of Asian economies still face challenges to put in place the fundamentals to actually implement them. The main task of public officials in protecting creditors’ rights includes enforcing the law. Improved enforcement requires strengthened institutional capabilities, which in turn require training, knowledge transfer, and leadership to eradicate corruption. To deal meaningfully with creditors’ rights, Asian regimes should also continue to work on the fundamentals of insolvency laws and procedures.
    • Disclosure and transparency
      The 1997 Asian financial crisis proved to be a watershed event adding to the urgency for strengthening disclosure rules and enforcement of accounting, auditing and nonfinancial disclosure standards. While jurisdictions varied widely in terms of accounting and auditing practices, the 2003 White Paper recommended full convergence with international standards as a goal to be achieved over time while recognising the practical challenges imposed by local conditions.
    • The responsibilities of the board
      The OECD Principles provide that "board members should act on a fully-informed basis, in good faith, with due diligence and care, and in the best interest of the company and the shareholders." Board members require experience, competence and knowledge in order to be "fully informed." Several Asian organisations and associations have developed or are developing voluntary board member education programmes. Education and training should cover board members’ basic legal and governance duties, along with areas such as financial literacy, the monitoring of internal control systems, business strategy development, risk policies and budgets.
    • Annex A. Responses to a Questionnaire on Implementing the Asian Roundtable's Recommendations on Corporate Governance, as contained in the White Pape
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