Essentials of Corporate Governance

Chapter 11. Corporate Governance in Emerging Markets: Asia and Latin America

After reading this chapter, you will be able to:

• Understand the role of Corporate Governance in Asia

• Understand the circumstances created by dictatorships

• Understand the role of Corporate Governance in Latin America

In Chapter 10 we discussed the significance of the international market and its role in shaping the face of Corporate Governance policies. Global economics is a complex and involved concept that consists of several interrelated issues. A thorough discussion of global economics and international policies is beyond the scope of this book.

Instead, this chapter presents the issues of Corporate Governance as they relate to the emerging economies of Asia and Latin America. It is important to remember that each of these economies holds within it several distinct markets and unique corporate structures. However, this general overview will provide sufficient context for gaining an expanded perspective on global Corporate Governance.

Asia

A common theme in the profiles of many Asian corporations is that they are family owned. In fact, family-owned firms represent anywhere from one-half to two-thirds of the publicly traded corporations of any given Asian country.^[1]

A second corporate feature of Asian companies is the pyramid structure, where one parent company operates partnerships and ownerships of several subsidiaries. The culminating effect of family ownerships and complex webs of subsidiaries is a system ...