Asian Corporate Governance—and the Case of Dual‐Class Shares: CARE Conference | Hong Kong Polytechnic University | June 9, 2014 |
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| Authors: | K C Chan |
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| Institution: | K. C. CHAN is Secretary for Financial Services and the Treasury in Hong Kong. Before accepting that appointment in July 2007, Professor Chan was Dean of Business and Management at the Hong Kong University of Science and Technology (HKUST). Before joining the HKUST Business School in 1993, Professor Chan spent nine years teaching at Ohio State University in the United States after earning both an MBA and PhD at the University of Chicago's Graduate School of Business. The main focus of his research was asset pricing and the evaluation of trading strategies and market efficiency. |
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| Abstract: | The case of the Alibaba IPO illustrates the divergence of corporate governance standards between the United States and many other markets, and reopens the debate on the one‐share one‐vote principle. Since corporate governance standards develop in ways that reflect the history and legal and political environments of different countries, we should not expect to see a global convergence of these standards—nor is it generally desirable to transplant policies from one market to another without understanding their historical backgrounds. Nevertheless, the U.S. approach to regulation raises the concern that competition among exchanges will cause issuers to “shop around” and tempt the exchanges to relax their standards in a race to the bottom. While market participants and regulators outside of the U.S. debate whether and how to modify the one‐share, one‐vote rule, they face challenges in coming up with new rules that strike the right balance between effective corporate governance and market development. |
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