New research has found that corporate governance has improved in seven of 11 countries in Asia over the past three years.
Singapore, Hong Kong and Japan led the field in improved corporate governance reporting in Asia, according to research by CLSA Asia Pacific Markets and the Asian Corporate Governance Association.
And while Singapore topped the Asia table with a mark of 67 for corporate governance, a grade of 80 is considered the benchmark for international best practice, according to the research.
China and India ranked seventh among Asia's 11 major stock markets for corporate governance, with China received a score of 47 for corporate governance rules and practice, 56 for its political and regulatory environment, 75 for accounting and auditing standards, 30 for corporate governance culture and 36 for enforcement.
"The region now accounts for more than 20 per cent of global corporate governance reports versus just 12 per cent five years ago," CLSA Asia Pacific Markets said.
Meanwhile a recent survey of Fidelity analysts found 21 per cent of major companies within Asia are applying a global corporate governance standard to their operations.
Some 50 per cent of Fidelity analysts said they expected it would take 10 years or longer for the companies they meet with in Asia to reach global international best practices in corporate governance.
"The application of corporate governance is on the rise in Asia," Fidelity Asia Fund portfolio manager David Urquhart said.
"There has been continuous improvement in corporate governance among Asian companies since the Asian financial crisis and this has been spurred on by the global financial crisis."
The introduction of international reporting standards, improvements to the legal environment in many countries and improved management understanding of this aspect of business have also contributed to the improvement, Urquhart said.
