Potential Role in Corporate Governance by Employees of Asian Enterprises

Abstract

Large publicly-held corporations or business groups in developing Asian economies are typically controlled (and managed) by families, and tend to suffer from poor corporate governance. Even though serious reform efforts are underway in the crisis-hit Asian countries along the Anglo-American model, it would likely take time for the model to take root in these economies. Any newly transplanted system needs local adaptation and setting complementary institutions in place for its proper functioning. If the abuse of power by controlling owners cannot be adequately checked by minority shareholders through the internal governance mechanisms or the market for corporate control, strong alternatives include two other important stakeholders: employees and creditor banks. This study evaluates the potential role of employees in corporate governance in developing Asian economies.