The far-reaching economic effects of the 1997 Asian financial crisis underscore the importance of structural reforms in the governance of the East Asian business sector. This paper measures the progress of corporate governance reforms in nine East Asian economies towards the guidelines established by the Pacific Economic Cooperation Council (PECC), as revealed empirically through two surveys. The first survey is a stock-taking exercise to take note of ongoing reforms in corporate governance rules and regulations, while the second covers perceptions of the implementation and enforcement of corporate governance rules as seen by fund managers and analysts. This study indicates a divergence between the regulatory environment and market perceptions of corporate governance practices in the countries sampled. The survey results also show that, although the nine economies do not differ significantly in the corporate governance rules and regulations they have put in place, there is a significant difference in terms of market perceptions of their corporate governance practices. More than an academic exercise, this study is meant to share the experiences of corporate governance reform among East Asian economies.
Stephen Y.L. Cheung is a Professor (Chair) of Finance, Department of Economics and Finance at the Faculty of Business, City University of Hong Kong.
Hasung Jang is Dean and Professor of Finance, Korea University Business School. He is also Executive Director of the Asian Institute of Corporate Governance, Korea University, and Chair of the Participatory Economy Committee, People's Solidarity for Participatory Democracy (PSPD) in Korea.