Theories and Realities of Asian Corporate Governance: From ‘Transplantation’ to the Asian Best Practices

The purpose of this article is to ascertain the major trends of corporate governance in Asia in an interdisciplinary approach based on both the legal and the management studies. First, major legal theories encouraging the ‘Transplantation’ of Western models to Asia are reviewed, which reveals a theoretical distortion between the normative goals and the technical designs of corporate governance (section-2). Next, several actual cases of ‘Transplantation’ in Asia are reviewed, which describes limited outcomes especially when poor ‘model laws’ are transplanted in a simple ‘receptive’ way (in section-3). Then, apart from the ‘Transplantation’ on the formal written law level, a deeper level of living laws or actual practices amid regional economic integration is observed based on an interim report of a corporate survey which the author and her colleagues have recently been conducting on the Japanese SME investment in Asia (section-4). A general implication drawn from the article is that the ‘Transplantation’ or ‘Convergence’ of the formal law means nothing without any local initiatives to ‘customize’ them as living laws within the actual commercial practice. An accumulation of empirical studies on such dynamic processes of the local customization of transplanted models will contribute to the exploration of the best practices in Asia.