The Asian Corporate Governance Association (ACGA) is a nonprofit membership association dedicated to promoting substantive improvements in corporate governance in Asia through independent research, advocacy and education. ACGA is funded by a membership base of more than 100 highly regarded organizations based in Asia and other parts of the world, including several of the world’s largest asset owners and managers. ACGA investor members manage more than US$15 trillion globally and hold significant stakes in Asian companies.
Chairman of ACGA Douglas C. Henck says the association was founded right after the Asian financial crisis in the late 1990s. “The founders thought the crisis had happened owing to a fundamental failure of corporate governance,” he notes.
ACGA makes a lot of effort in the education of corporations and governments. “We are consulted by governments across the region. Like the highly visible biennial ‘CG Watch – Market Rankings,’ governments will get cranky if they drop in the rankings.”
On the research front, ACGA publishes white papers. For instance, it has published a white paper on Japan’s adoption of a unique statutory audit function rather than an audit committee. “The paper looks at the pros and cons of the two systems and how to work through that. We are working on another paper looking at what it means to be sitting on the board [of companies] in mainland China, what are the responsibilities, and the particular intricacy of state-owned enterprises,” Henck notes.
“We do government advocacy. We have advocated blocking the dual share listing in Hong Kong. We also advocate that companies need an independent group overseeing the auditors. In Japan, the government wanted to delist Olympus, but we advocated otherwise because it would take away the right of shareholders to buy more shares and have their votes counted.”
Back in 1997, only one or two countries in Asia had some elements specifically for strengthening corporate governance in their regulations and laws, such as a public code of corporate governance, an organization overseeing the auditors, and rules against insider trading, Henck says. “Today every country has such code and done something about audit, and independent directors on the board. Some have done better than the others, but there has been clear progress over the years.”