According to The World Bank (2006), good' corporate governance (CG) refers to the structures and processes for the direction and control of companies. This involves the relationships among the management, board of directors, controlling and minority shareholders as well as stakeholders.
The reality shows weak corporate governance has precipitated the financial crisis in 1997 within the Asia Pacific region (Chang 2006, 409) and consequently, many Asia-Pacific economic cooperative economies have realized that development of better corporate governance systems is a key component of the policy and structural re-forms essential for a sustained recovery (Ali 2000). This involves a strategic role of the Asia Pacific governments.
However, there are different perspectives to define good' corporate governance and the appropriate role of the governments, which generates risks of controversy in the analysis.
This paper is divided in three parts.
The first part (1) explores the theoretical disagreements related to good' corporate governance and the appropriate role of the government. The second part (2) pro-poses general recommendations based on a specific perspective.
[...] While multilateral agencies provide the bulk of corporate governance assistance to Asia Pacific governments (DFAT 2002, the growing presence of foreign funds in Asian economies aims in providing adequate pressure to improve CG practices (Krishnamurti, Savic and Savic 2005, 91-92). Therefore, it is relevant to discuss the implications for Asia Pacific governments. Broadly speaking, is it the role of the government itself to support the ‘good' corporate governance? “Affected by the crisis [ . the governments have passed regulations to strengthen corporate governance “(Chang 2006, 413). [...]
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[...] Government should invest funds in enforcing laws related to ‘good' corporate governance An enforcement system consists of a continuum of overlapping mechanisms of regulation (Millstein et al which would facilitate the application of ‘good' corporate governance in Asia Pacific economies. There is a range of enforcement methods that the government should strategically use to support ‘good' corporate governance principles. Enforcement environment illustrates this point by considering social and cultural factors to encourage the effective application of regulations (Millstein et al 52) However, the effectiveness of all enforcement mechanisms in the area of corporate governance does depend on the general institutional environment in addition that it should compete with other uses of government funds, including demands for redistribution (Millstein et al 45-59). [...]
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