Wong, Simon C.Y.2012-08-132012-08-132009-06https://hdl.handle.net/10986/11114This private sector opinion seeks to demonstrate that while conventional governance mechanisms can be highly effective in many situations, they are not appropriate remedies in all contexts. In some cases, the prescribed medicine actually exacerbated the governance ailment that it was designed to cure. To illustrate, the rapid growth of executive compensation persisted and in some markets, accelerated after the introduction of individual executive pay disclosure. In the financial sector, the shift toward a board dominated by independent directors perceived by many to be key for effective monitoring of management ultimately proved to be its Achilles' heel as weak industry knowledge meant that non-executive directors were unable to pick up on warning signs of imprudent risk taking by management. This section will examine how the core set of corporate governance instruments comprising transparency, independent monitoring, economic incentives, shareholder rights, and financial liability has been applied to different issues and contexts. It will discuss the extent to which these mechanisms have been effective and analyze the limits of their application by surveying cases where they have failed to work as intended. In addition, it will set forth proposals to improve the use of specific tools and suggest how certain governance issues should be addressed.CC BY-NC-ND 3.0 IGOACCESS TO INFORMATIONACCOUNTABILITYACCOUNTINGACCOUNTING RULESACCOUNTING STANDARDSACQUISITIONSAGENCY PROBLEMSARTICLES OF ASSOCIATIONASSET MANAGEMENTAUDIT COMMITTEEAUTHORITYBAD FAITHBANK HOLDINGBANKSBOARD MEETINGSBOARD MEMBERSBOARD MEMBERSHIPBUSINESS JUDGMENT RULEBUSINESS UNITBUSINESS UNITSCAPITAL MARKETCAPITAL MARKETSCAPITAL REQUIREMENTSCASH FLOWCASH FLOWSCDCEOCEOSCHAIRMAN AND CEOCHIEF EXECUTIVECODE OF CONDUCTCOLLECTIVECOLLECTIVE ACTIONCOMMERCIAL RELATIONSHIPSCOMPANYCOMPANY INFORMATIONCOMPANY LAWCOMPENSATION POLICYCOMPETITORSCONFLICT OF INTERESTCONFLICTS OF INTERESTCONGLOMERATECONSENSUSCONTROLLING SHAREHOLDERSCORPORATE EXECUTIVESCORPORATE GOVERNANCE CODESCORPORATE GOVERNANCE REFORMCORPORATE GOVERNANCE REFORMSCORPORATE GOVERNANCE REGIMECORPORATE GOVERNANCE REGIMESCORPORATE GOVERNANCE SYSTEMCORPORATE OFFICERSCORPORATE PERFORMANCECORPORATE SCANDALSCORPORATIONCORPORATIONSCOUNTRY TO COUNTRYCREDIT RATINGCREDIT RATING AGENCIESCREDIT RATINGSDEBTDEBT ISSUESDECISION-MAKINGDEPOSITDERIVATIVEDERIVATIVESDEVELOPING MARKETSDIRECTOR LIABILITYDISCLOSUREDISCLOSURE REQUIREMENTDISCLOSURE REQUIREMENTSDISSEMINATION OF INFORMATIONDIVIDENDSECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC REFORMECONOMIC STRESSEMERGING MARKETEMERGING MARKETSEMPLOYMENTENABLING ENVIRONMENTENTREPRENEURSHIPEQUITY HOLDERSEQUITY MARKETSESCROWEXCHANGE COMMISSIONEXPANSIONEXPOSUREFAIR PRICEFAIR VALUEFIDUCIARY OBLIGATIONSFINANCE CORPORATIONFINANCIAL ADVISERFINANCIAL CRISESFINANCIAL CRISISFINANCIAL HEALTHFINANCIAL INCENTIVESFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL RESULTSFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL STATEMENTSFINANCIAL SYSTEMFIRM SIZEFIRMSFOREIGN PORTFOLIOFOREIGN PORTFOLIO INVESTORSFRAUDGENERAL PARTNERSHIPGLOBAL CORPORATE GOVERNANCEGLOBAL INVESTORGLOBAL INVESTORSGOVERNANCE ARRANGEMENTSGOVERNANCE GUIDELINESGOVERNANCE ISSUESGOVERNANCE MECHANISMSGOVERNANCE PRACTICESGUARANTORHOLDING COMPANYHOLDINGSHUMAN RESOURCESINCOMEINCOME TAXESINDEPENDENT BOARDSINDEPENDENT DIRECTORINDEPENDENT DIRECTORSINDIVIDUAL COMPANIESINDIVIDUALSINFORMATION ASYMMETRYINSIDER DEALINGINSOLVENCYINSOLVENCY REFORMINSTITUTIONAL INVESTORINSTITUTIONAL INVESTORSINSTITUTIONAL SHAREHOLDERINSTRUMENTINSURANCEINSURERSINTERNATIONAL FINANCEINVESTEE COMPANIESINVESTMENT BANKINGINVESTMENT BANKSINVESTMENT DECISIONINVESTMENT DECISIONSINVESTOR PARTICIPATIONISSUANCEJURISDICTIONSLAWYERLAWYERSLEGAL FRAMEWORKLEGISLATIONLENDING DECISIONSLIMITEDLIMITED LIABILITYLIMITED LIABILITY PARTNERSHIPLIQUID MARKETSLISTED COMPANIESLOW-INCOME COUNTRIESMAJORITY VOTEMAJORITY VOTINGMARKET RISKMATURITYMERGERSMINORITY INVESTORSMINORITY SHAREHOLDERSMOTIVATIONSNUMBER OF SHAREHOLDERSOUTSIDE INVESTORSOWNERSHIP STRUCTUREOWNERSHIP ­ RIGHTPARTYPORTFOLIOPORTFOLIOSPROPRIETARYPUBLIC EQUITYPUBLIC INFORMATIONQUALITY ASSURANCE MECHANISMRAPID GROWTHREGULATORY ENVIRONMENTREPRESENTATIVESRESERVERETURNRISK EXPOSURESRISK FACTORSRISK MANAGEMENTRISK PROFILESAVINGSSCANDALSECURITIESSECURITIES REGULATORSSHARE OPTIONSSHARE PRICESHARE VALUESHAREHOLDERSHAREHOLDER ACTIVISTSSHAREHOLDER BASESHAREHOLDER INTERESTSSHAREHOLDER MEETINGSSHAREHOLDER RIGHTSSHAREHOLDERSSHAREHOLDERS MEETINGSHAREHOLDERS MEETINGSSMALLER COMPANIESSPONSORSSTAKEHOLDERSSTOCK OPTIONSSUBSIDIARYSUPPLIERSSYSTEMIC RISKTAXTAX LAWTRADINGTRANSACTIONTRANSITION ECONOMIESTRANSPARENCYTRUST FUNDTURNOVERUNDERWRITERSUNIONWITHDRAWALWorld Bank10.1596/11114