Title: The Anglo-Saxon corporate governance model in Asia
Author: Lerong He, Shih-Jen Kathy Ho
Department of Business Administration and Economics, State University of New York, College at Brockport, Brockport, NY, 14420, USA.
Department of Accounting, College of Business Administration, Niagara University, Niagara Falls, NY, 14109, USA
Journal: J. for Global Business Advancement, 2009 Vol.2, No.1/2, pp.173 - 190
Abstract: This paper investigates the effectiveness of the Anglo-Saxon corporate governance model in Asia. The paper finds that all of the investigated Asian economies issued new corporate governance codes to promote best practices in the Anglo-Saxon model after the 1997-1998 Asian financial crisis. In our sample, the majority of listed firms in Asia implement a separate CEO/chairperson position and appoint a significant number of non-executive directors on the board. The result of this study also indicates that the prediction of the agency theory is valid under the Asian context. Using the combined sample of all Asian economies, we find that ownership concentration has a positive relation on firm performance and the controlling shareholder's ownership has a decreasing positive link with firm value. In addition, firms with a board dominated by non-executive directors are associated with higher performance, and smaller boards are linked with better performance. The paper also finds that the Anglo-Saxon corporate governance model is more effective in Asian countries adopting the continental law system and without the influence of Confucian values.
Keywords: Asian economies; board of directors; corporate governance codes; firm performance; Anglo-Saxon corporate governance model; Asia; controlling shareholder; shareholder ownership; continental law system; Confucian values.