'Corporate standards best in Singapore'

'Corporate standards best in Singapore'

Agence France-Presse, Singapore

Singapore has the highest corporate governance standards in Asia while Vietnam and China suffer from the worst, according to a survey of expatriates doing business in the region.

The Political and Economic Risk Consultancy (PERC) group, which carried out the survey, said the overall trend across Asia was improving slightly while corporate scandals in the United States were magnifying the region's progress.

"To give Asia its due, the one country where perceptions have deteriorated the most in the past year is the U.S.," PERC said in a review of regional corporate governance standards.

"Asia might have its problems with corporate governance but views have been fairly consistent over the years and the general trend has been better."

PERC's survey ranked Singapore top of the list of clean business environments, ahead of Japan and Hong Kong.

South Korea and Malaysia shared fourth spot, while the Philippines followed after recording a slight improvement in expatriates' perceptions.

"Singapore has done an excellent job of promoting itself as a place striving for better corporate governance," PERC said.

"The island has long had a reputation for being intolerant of corruption and for having one of the more efficient, no-nonsense regulatory systems in Asia."

Japan's second placing reflected an understanding by Western expatriates of the differences between local corporate standards and their own.

"By Japan's standards, the quality of corporate governance is good but, by Western standards, the interests of shareholders are neglected," PERC said.

At the other end of the scale, Thailand, Indonesia and India were lumped together with Vietnam and China, and in some cases recorded even lower assessments than the communist countries.

However, PERC said China and Vietnam were still the region's worst performers in corporate transparency.

"Despite what our survey indicates, the quality of corporate governance in Thailand is not the worst in Asia," the PERC report said.

"The situation is head and shoulders better than in places like Vietnam and China, where the stock markets are much more poorly regulated and there is no real body of private listed companies (as opposed to listed companies that are state-owned) to compare with Thailand."

The PERC report was scathing for all the lower-ranked nations, with an extract of the Indonesian summary representative of the other assessments.

"What credibility most Indonesian banks and companies had in terms of their reputations for corporate governance went out the window with the 1997-98 financial meltdown," PERC said.

"Not only are companies poorly managed and the interests of the minority shareholders frequently neglected, but also the stock exchange regulatory authorities have a poor reputation, accounting standards are not trusted and the legal system is viewed more as a threat than an institution that offers protection."

China fared little better in the report: "There have been so many banking and corporate scandals in recent years in China that perceptions regarding governance standards are very poor.

"China is anything but transparent."