ABSTRACT
Throughout Asia, it is now recognized that shareholders delegate the detailed and ‘day-to-day’ decision-making of the corporation to the board of directors, but that they can, if they see the need, participate in significant corporate decision-making processess through various legal measures. They can attend shareholders’ meetings, make shareholder proposals, solicit proxies and convene extraordinary shareholders’ meetings. Shareholders can also resort to seeking criminal or administrative investigations to seek the accountability of management. Civil lawsuits can be time consuming and it is difficult to obtain enough evidence to prevail in litigation. In recent years, corporate governance advocates – particularly public employee pension fund investors like Calpers and Hermes in the West – have tended to focus on issues such as greater independence for the board of poorly performing companies, and the quicker and less troublesome removal of underperforming CEOs. Pressure applied by corporate governance advocates and large institutional investors has certainly resulted in changes of leadership at several major Western companies, as reported by Booz Allen Hamilton in 2002, but this has yet to happen in Asia.1 In the Asia-Pacific region, the same study reported that
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‘institutional investors and nominee shareholders should consider the costs and benefits of exercising their voting rights’ but currently, institutional investors in Asia still prefer to vote with their feet. With thousands of companies to choose from, who can be surprised?
