Corporate governance improves at Asian firms

Corporate governance improves at Asian firms

Deutsche Press Agentur, Singapore

Asian financial institutions have improved their corporate
governance in recent years, more from a desire to comply with
regulations than to capitalize on its strategic advantages, a
PricewaterhouseCoopers (PwC) study said on Friday.

The global study surveyed more than 200 senior executives, 25
percent of whom were from the Asia-Pacific region.

A critical test of good governance is the nature of dialogue
institutions have with their key stakeholders, PwC said.

Its Asian findings published in The Business Times show firms
give auditors and regulators high priority when it comes to
communications, rather than shareholders, customers and
employees.

"Good governance is about anticipating the need of critical
stakeholders, managing their expectations and communicating
actively with them," PWC said.

Sixty-three percent of the Asian respondents said their
internal culture has become more focused on compliance and
governance. "It appears that change has occurred by the desire to
comply with regulations rather than to improve the institution's
management tools," PWC said.

The study also found that 67 percent of financial institutions
in the region indicated they will increase governance-related
resources in the next 12 months.

About 61 percent expect to expand their risk management
functions and 57 percent their compliance functions.

The top three priorities of board members are ensuring
adequate internal controls, questioning and refining company
strategy and ensuring compliance with regulators, PwC found.

"What is needed is a new and integrated approach to governance
that does not limit an institution's ambitions to avoiding
trouble with regulators, but strives to improve the quality of
its management and controls and to reap the benefits," said
Dominic Nixon, a member of PwC's financial services advisory
leadership team.