The Asian Financial Crisis which exposed the corporate governance weaknesses was a wake-up call for all the policymakers, standard setters as well as the companies (OECD, 2014). The parties that involved and affected from the crisis started to realize the importance of having strong corporate governance practices in their countries. Consequently, the Asian economies along with the OECD established the Asian Roundtable on Corporate Governance in 1999, in order to support the enhancement of corporate governance rules and practices (OECD, 2014).
As far as the Asian countries concern regarding the corporate governance issues, they started to enforce their own Code of Corporate Governance to avoid any financial crisis in the future. Among the countries that established the Code of Corporate Governance after the financial crisis were Malaysia and Singapore, which in the year 2000 and 2001 respectively (OECD, 2014). In contrast, Hong Kong has become the first Asian country that produced the Code of Best Practice, which was officially released in 1993 (ACGA, 2012). By having the Code before 1997 Asian financial crisis, Hong Kong became a top-ranked country with strong corporate governance practice in early 2000s. However, as the development of corporate governance practices were actively took place in Asia, Singapore replaces Hong Kong at the top in 2010 while Malaysia shows good performance in improving its corporate governance practices (Lees, 2010). The improvement of corporate governance among these three countries can be seen by the revision of their ‘Code’. Hong Kong Stock Exchange revised the Corporate Governance Code in 2004, followed by Singapore in 2005 and Malaysia in 2007 (OECD, 2014). In 2012, these three countries faced their second phase revision of their Corporate Governance Code (OECD, 2014).
In the era of corporate governance reforms, there are a lot of related governance issues raised by various parties towards the authorities in order for them to get some improvements in solving those issues. One of the issues is family ownership in Asia countries. As at 2001, Malaysia and Hong Kong show the highest degree of family ownership among Asian with 67.2% and 66.7% of market capitalization controlled by family groups respectively, while Singapore at the average level with 55.4% (Cheung & Chan, 2002). The high percentage of family ownership in Malaysia and Hong Kong caused these countries to face the issue on the lack of uniform accounting standards and sufficient disclosure of information (Cheung & Chan, 2002). Consequently, these three countries including Singapore revised their Corporate Governance Code and highlighted the transparency and disclosure of information in order for them to minimize the issues regarding family ownership corporations.
Another development of corporate governance in Asia is related to the legal and regulatory reforms. In Malaysia, the Companies Act was amended in 2007 and 2010 with the introduction of...