Asia has substantially revamped its corporate governance framework but more work needs to be done 10 years after a financial crisis struck the region, a meeting of regional officials declared June 27. About 140 Asian policymakers, regulators, stock exchanges and other delegates gathered for the Asian Roundtable on Corporate Governance resolved to step up implementation and enforcement.
"Even when Asian corporate governance rules reflect the most developed thinking in corporate governance their credibility depends on how well they are implemented and enforced," said a declaration issued at the start of the two-day meeting. Delegates also pledged to fill the gaps in the system of rules and regulations. They said monitoring and disclosures of related party transactions shareholders' derivative/class action suits can be made more effective. They also agreed to assess whether regulations are effective, and to exchange information not only within Asia but also with those outside the region.
"The financial crisis in 1997 triggered a lively discussion about corporate governance in Asia. It was generally agreed that weak corporate governance practices made companies more vulnerable and deepened the economic problems associated with the financial crisis," the declaration said. "Improving corporate governance became a key tool in the process of regaining investor confidence in Asia, re-establishing access to global capital markets and improving the private sector's ability to contribute to stable economic growth."
The Roundtable includes representatives from the OECD (Organization for Economic Cooperation and Development), as well as Bangladesh, China, Hong Kong, India, Indonesia, South Korea, Malaysia, Pakistan, the Philippines, Singapore, Taipei, Thailand and Vietnam.
"Today, all Roundtable economies have national corporate governance codes and many have institutions promoting good corporate governance," it said, citing the statutory right of shareholders to participate in key corporate governance decisions as among the improvements.
Copyright Agence France-Presse, 2007