Fledgling Corporate Governance and Independent Directors in Cambodia's Securities Market

Abstract

This article outlines the developments and challenges involved in introducing a new securities market in Cambodia, a developing country with a relatively open economy but some significant government-linked enterprises as well as family-linked firms. They operate in an environment characterized by an authoritarian democracy, limited regulatory capacity and access to courts, extensive corruption, and quite ready access to bank finance. Corporate and securities legislation has been enacted, and a new stock exchange has been established with support from Korea, but it has struggled to attract many listings.

The article focuses on the requirements introduced for independent directors (IDs), as well as non-executive directors more broadly, in Cambodia's listed companies. Recent research illustrates how such requirements reveal important features of corporate governance regimes across Asia. The paper briefly compares developments in Singapore, Thailand and Malaysia, as well as other Southeast Asian states with more fledgling stock markets such as Laos and Myanmar. The path-breaking partly empirical analysis uncovers when and why ID requirements were introduced in Cambodia, how they were implemented, who are the IDs, and what the (likely) impacts are from IDs.

Keywords: comparative law, Asian law, Association of Southeast Asian Nations (ASEAN), corporate governance, company law, securities regulation

JEL Classification: K10, K30