Requirements for Good Governance

• Since the crisis, most East Asian governments recognise the urgent need to strengthen regulations to increase corporate transparency and enforce better treatment of outside investors; this is essential to support regional economies transition from a relationship to a rules based business model and enable their return to robust growth. • In the region's most advanced economies, corporate disclosure requirements now approach or equal international best practice, but in several emerging economies, enforcement is weak. • Since the crisis, accountancy and auditing rules also are stronger, with international accounting standards, external auditors and in many cases, internal audit committees now mandatory requirements for listed companies in most regional economies. However, in most emerging markets and even several mature regional economies, accounting practices still lag legislative requirements. • Many but not all regional economies now protect minority shareholder rights; however, the dominance of family owned corporates still undermines incentives for managers to maximise value for all shareholders, requiring continued vigilance by regulators. • Since the crisis, most economies have introduced best practice bankruptcy legislation but several regional economies lack strong court implementation, undermining creditor protection.