Comparative Corporate Governance in Asia and the United States

by Assoc Prof Umakanth Varottil & Assoc Prof Dan W Puchniak

Over the last three decades, the field of comparative corporate law has evolved from being an obscure backwater of legal scholarship to a prominent field which occupies the minds of many of the world's leading corporate law scholars. During much of this evolution, the United States dominated the global economy as the world's sole economic superpower. As a result, many of the foundational comparative corporate law theories-which ostensibly have universal applicability-have been derived from America's corporate governance experience.

Since the new millennium, the shift in global economic power towards Asia has been extraordinary. Asia's tiger economies now appear at the top of global rankings in terms of per capita GDP and economic efficiency. China is now poised to overtake the United States as the world's largest economy-a position the United States has held for over a century. By 2020, three of the world's four largest economies will be in Asia (China (1), Japan (3) and India (4)).

This meteoric rise of Asian economies has seen the concurrent rise of Asian financial markets and companies. The first decade of the new millennium saw Asian financial markets take centre stage in the global competition for shareholder capital. In 2010, Asian stock exchanges captured 66 percent of the capital raised globally through initial public offerings (IPOs), up from 12 percent in 1999. Indeed, in three years in the past decade, the Hong Kong Stock Exchange has attracted more fresh shareholder capital than either the New York Stock Exchange or London Stock Exchange, leading the world in capital raised through IPOs. Similarly, Asian companies can now claim to be the most powerful in the world. In 2013, for the first time, there were more Fortune Global 500 Companies in Asia than in either North America or Europe. In fact, there are now twice as many Fortune Global 500 Companies headquartered in Tokyo (47) and Beijing (41) than in New York (18) and London (18). Regardless of whether this century turns out to be 'Asia's century', as many predict, what has already occurred in Asia provides a unique opportunity to evaluate whether the conventional wisdom about corporate governance, which has been derived primarily from America's corporate governance experience, has universal applicability.

This project-which will be run jointly by NUS Law (Centre for Asian Legal Studies; and, Centre for Law & Business), SMU Law and Berkeley Law-hopes to seize this opportunity by bringing together leading comparative corporate law scholars from Asia and the United States to discuss cutting-edge issues in comparative corporate governance. The output from this project will be published as articles in two issues of the Berkeley Business Law Journal.