The hard lessons on corporate governance learned during the fallout from the Asian currency crisis must not be lost during the current period of economic growth and easy availability of funds, a conference in Singapore was warned on June 27.
"When the flight to safety and quality occurs, it will be those countries and companies with robust standards of corporate governance that will be better placed to keep the loyalties of investors," Singapore's Minister for Education Tharman Shanmugaratnam told the Organisation for Economic Cooperation and Development (OECD) Asian roundtable.
Ten years after the financial crisis began in Thailand in July 1997, Tharman urged governments and the private sector to keep up the momentum. Institutes of directors have been set up in Thailand, Malaysia, China, Hong Kong, Indonesia, South Korea and the Philippines, Tharman noted, adding minority shareholder watchdog groups are in place in Taiwan, Malaysia and South Korea.
"Accounting rules have also been beefed up across the region," Tharman said. "China, India, Indonesia and the Philippines have revised their accounting standards to bring them more in line with international standards."
But well-functioning boards aimed at sustained performance are works-in-progress in Asia, he noted. "We should focus our energies not just on formulating ground rules and best practice codes, but on encouraging and helping companies to address practical issues in making their boards effective and high performing," he told the delegates.
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