Asia lacks corporate governance

Asia lacks corporate governance

SEOUL (Reuters): Good corporate governance does not conflict with Asian values or the values of any other region of the world, a senior official of the Organization for Economic Cooperation and Development (OECD) said on Wednesday.

"One can overplay the question of Asian, non-Asian or Western values," Joanna Shelton, OECD deputy secretary-general, told a news conference.

A lack of corporate governance, or transparency and accountability, was a fundamental cause of the Asian crisis and the spread of the crisis elsewhere in the world, she said.

"Some of the phenomena we see are not unique to the Asian situation," Shelton said.

The countries hit by the crisis had weak corporate governance in common, she said.

Enhancing corporate governance so that systems and markets are open to all is a crucial part of preventing another crisis, she said.

"Increasingly in the globalized world, if companies wish to attract and keep investments from outside the companies, this model of a closed, insider system of managing companies is no longer sufficient," she said.

Crisis-hit countries should improve corporate disclosure and transparency and take steps to enhance protection of shareholders' rights, she said.

An effort also should be made to improve bankruptcy and insolvency laws so that companies can exit the market smoothly, she said.

Shelton was in Seoul for an OECD conference on corporate governance.

OECD ministers requested last year that the organization develop guidelines on corporate governance, and those guidelines are expected to be finalized at this year's OECD ministers meeting in May.