Relevance of Corporate Governance Standards for Emerging Economies
XI Capital Markets Conference, 21-22 December 2012, Indian Institute of Capital Markets (UTIICM)
12 Pages Posted: 2 May 2013
Date Written: December 21, 2012
One of the structural weaknesses responsible for the outbreak of 1997 Asian Crisis was poor corporate governance. In companies controlled by families/founders, they can easily pursue private benefits at the expense of minority shareholders. Post such event, the policymakers have become more responsible and relied on implementing effective policies in place based on the developed economies framework. But emerging economies differ, characterized by a highly concentrated ownership, and hence need to develop policies suiting their economic growth. Different economies have responded in varied manner and to interaction between the institutions, government and companies. Hence it becomes important to study the challenges and trend across such markets. We try to outline their growth in building effective governance code for emerging and ASEAN economies. Understanding the key policy points for each helps us in gaining an insight in deciding whether they show reasonable standards of governance. The implications resulting from the inability to have good standards affects the company’s stock performance and profits. Dissecting the causes for failure of coming up with good standards, and helps in comprehending whether flaw in he policies in place. Emerging economies issues vary from country to country and there is no one system which fits all.
Keywords: Governance Code, ASEAN Economies
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