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Corporate Reform in East Asia

Corporate Reform in East Asia. Prof. Stephen Y.L. Cheung Department of Economics & Finance City University of Hong Kong. Priorities in promoting corporate governance in East Asia (I). Board Increase the number of independent directors Transparent board structure

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Corporate Reform in East Asia

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  1. Corporate Reform in East Asia Prof. Stephen Y.L. Cheung Department of Economics & Finance City University of Hong Kong

  2. Priorities in promoting corporate governance in East Asia (I) Board • Increase the number of independent directors • Transparent board structure • Heighten fiduciary duty of BoD • Criterion of the board of directors

  3. Priorities in promoting corporate governance in East Asia (II) Law and regulations • Stringent regulation to cope with corruption • Enforce legal framework • Strengthen capital market regulation

  4. Priorities in promoting corporate governance in East Asia (III) Disclosure • Timely and sufficient financial disclosure • Adopt an international standard accounting • Non-financial disclosure • Corporate governance/ ethical/ social issues • Better risk management

  5. Priorities in promoting corporate governance in East Asia (IV) Shareholders • Strengthen minority shareholder protection • Educate the public shareholders • Exercise their rights • Encourage participation of institutional and shareholders in monitoring performance

  6. Comparison of corporate governance in East Asian Economies (I) Criterion of the board members

  7. Comparison of corporate governance in East Asian Economies (II) Separation of chairman and CEO

  8. Comparison of corporate governance in East Asian Economies (III) Board size

  9. Comparison of corporate governance in East Asian Economies (IV) Independent directors (IDs)

  10. Comparison of corporate governance in East Asian Economies (V) Remuneration review

  11. Comparison of corporate governance in East Asian Economies (VI) Assessment of board performance

  12. Comparison of corporate governance in East Asian Economies (VII) Communication with institutional and retail investors, and information disclosure (I)

  13. Comparison of corporate governance in East Asian Economies (VIII) Communication with institutional and retail investors, and information disclosure (II)

  14. Comparison of corporate governance in East Asian Economies (IX) Board meetings (I)

  15. Comparison of corporate governance in East Asian Economies (X) Board meetings (II)

  16. Comparison of corporate governance in East Asian Economies (XI) Disclosure on directors’ remuneration

  17. Comparison of corporate governance in East Asian Economies (XII) Corporate governance disclosure (I)

  18. Comparison of corporate governance in East Asian Economies (XIII) Corporate governance disclosure (II)

  19. Comparison of corporate governance in East Asian Economies (XIV) Accuracy of information disclosure (I)

  20. Comparison of corporate governance in East Asian Economies (XV) Accuracy of information disclosure (II)

  21. Comparison of corporate governance in East Asian Economies (XVI) Shareholders’ voting rights

  22. Recent development of corporate governance in East Asian Economies (I) Hong Kong • Amendments to Companies Ordinance • Minority shareholders rights • Voting rights • Rules for company annual meetings and accessibility to corporate records by shareholders

  23. Recent development of corporate governance in East Asian Economies (II) Malaysia • All directors and company advisers are responsible for violations of rules regarding to director liability, financial reporting, disclosure and investor protection from June 1, 2001. • Disclose the responsibility of directors in internal controls in annual reports • Transform from the rule-based to the disclosure-based regulatory framework

  24. Recent development of corporate governance in East Asian Economies (III) Singapore • New Securities and Futures Act • Listed companies will be charged for violation of disclosure regulations, in either civil or criminal penalty • Publish the first corporate governance code in April 2001 • Disclosure of executive and director remuneration • Board composition (IDs: 1/3 of board) • Audit committee (All IDs) • Fair and Equitable information disclosure • Include the corporate governance practices in annual reports from January 2003

  25. Recent development of corporate governance in East Asian Economies (IV) China • Proposed rules on pre-listing corporate restructuring and corporate governance structure • Separation from parent companies on operations, assets, and structure • From 2002, listed firms publish quarterly financial reports starting

  26. THE END

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