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El. knyga: Sustainability and Corporate Mechanisms in Asia

(National University of Singapore)

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This is the first book to provide a comparative and critical analysis of why and how six corporate mechanisms - (1) sustainability reporting; (2) board gender diversity; (3) constituency directors; (4) stewardship codes; (5) directors' duty to act in the company's best interests; and (6) liability on companies, shareholders and directors - have been or can be used to promote sustainability in the four leading common law jurisdictions in Asia (Singapore, Hong Kong, India and Malaysia). A central challenge is, whether and if so, how the corporate mechanisms should be reconceptualised to promote sustainability in an environment that is characterised by controlling shareholders, particularly the government in state-owned enterprises. Because controlling shareholders are the norm for the majority of the world's companies, and state-owned enterprises play a significant role, this book has important insights on the problems and prospects of advancing sustainability in concentrated and mixed ownership jurisdictions.

Critically examines how corporate law and governance can be used to promote sustainability in Asia. It will be of interest to a broad audience, ranging from students and scholars to regulators and observers of comparative sustainability, corporate social responsibility, comparative corporate law and corporate governance, as well as Asian studies.

Recenzijos

'Sustainability and Corporate Mechanisms in Asia is an important, erudite and accomplished work. It should be read by the very directors, C-suite executives, policy makers and leaders responsible for corporate social responsibility in the very companies which are the focus of his book. I recommend it without hesitation to anybody who has an interest or stake in corporations and sustainability in Asia. Because, as Lim has eloquently and persuasively argued throughout his book, there is not only a clear and positive correlation between sustainability and a company's financial performance, but because corporate sustainability 'is a morally good thing to do'.' Edmund Lee, Modern Law Review 'Ernest Lim has written a uniquely important and informative book on sustainability in Asia. It sets out the case for sustainability and the way in which it can be effectively implemented with exceptional clarity and insight. It will be an invaluable guide for those interested in the principles, practices and policies that should guide the adoption of sustainability in Asia.' Colin Mayer, CBE, FBA, Peter Moores Professor of Management Studies, Saļd Business School, University of Oxford, and Academic Lead, British Academy Future of the Corporation Programme 'In this important contribution, Professor Ernest Lim shifts the academic debate about corporate sustainability from a focus on corporate actors and their behavior to a focus on corporate governance and legal mechanisms. The book identifies six such mechanisms - sustainability reporting, board gender diversity, constituency directors, stewardship codes, director duties, and liability - and provides a comprehensive, clear, and cogent analysis of their use in Hong Kong, India, Malaysia, and Singapore. Professor Lim also draws broader lessons about these mechanisms for corporate governance, including the role of state-owned enterprises and controlling shareholders.' Frank Partnoy, Adrian A. Kragen Professor of Law, University of California, Berkeley School of Law 'The obligations of businesses to play a leading role in addressing our global climate crisis are increasingly pressing. Yet the scope and contours of those obligations remain ill-defined. Professor Lim's careful and thorough work brings precious clarity. His work will be helpful and enlightening to scholars, business leaders, governments, and NGOs across Asia - and beyond.' Kent Greenfield, Dean's Distinguished Scholar, Boston College Law School 'Professor Lim's highly original work adds important nuances to the ongoing debates through its convincing demonstration that the common law family is a far more heterogeneous group in respect of corporate sustainability than assumed by advocates of the 'legal origins matter' thesis  His rich and nuanced account of how these mechanisms have intertwined and interacted with broader institutional conditionalities in the four jurisdictions in addressing the sustainability question is solidly grounded in the comparative literature while revealing a distinctive Asian perspective. Importantly, the case studies offer fresh comparative insights with implications that go beyond the four surveyed jurisdictions.' Xi Chao, Journal of Comparative Law

Daugiau informacijos

This book critically examines how corporate law and governance can be and should be used to promote sustainability in Asia.
List of Figures
xv
List of Tables
xvi
Acknowledgements xvii
List of Abbreviations
xviii
1 Introduction and Overview
1(54)
I Introduction
2(9)
A Terminology
4(3)
B Why Companies Should Pursue Sustainability
7(1)
1 Strategic Reason
7(3)
2 Ethical Reason
10(1)
II Rationales and Motivations
11(14)
A Significant, Recent Legal Developments in Common Law Asia
12(1)
1 Sustainability Reporting
12(2)
2 Gender Diversity on the Board of Directors
14(1)
3 Constituency Directors
15(1)
4 Stewardship Codes
16(1)
5 Directors' Duty to Act in the Best Interests of the Company
17(1)
B Common Law Asia Calls into Question Two Influential Theories
18(1)
1 Legal Origins
18(4)
2 Institutional Context
22(3)
III Factors that Drive Sustainability in Common Law Asia
25(14)
A Socio-economic Development Agendas of Governments
25(1)
1 Singapore
25(2)
2 Malaysia
27(2)
3 India
29(3)
4 Hong Kong
32(1)
B Rules of Stock Exchanges
33(2)
C Internationalisation of Companies
35(1)
D Rise of SRIs
36(3)
IV Problems and Effects
39(11)
A Conflicts of Interest between the Government's Roles as Both Shareholder and Regulator
41(2)
B Political Interference and Extractions of Private Benefits of Control
43(2)
C Two Qualifications
45(1)
1 First Qualification: Public but Not Private Benefits of Control
46(1)
2 Second Qualification: Protect and Promote the State's Legitimacy
46(4)
V Structure
50(5)
2 Sustainability Reporting
55(48)
I Structure and Contents of Reporting Requirements
57(26)
A Structure
57(1)
1 Comply or Explain
58(9)
2 Mandatory
67(2)
B Contents
69(1)
1 Materiality of ESG Factors
69(4)
2 Indicators
73(4)
3 India: BRRs and the CSR 2 Per Cent Spending Requirement
77(6)
II Qualitative Evaluation of Sustainability Reports
83(14)
A Effect of Corporate Characteristics
83(1)
1 Singapore
83(1)
2 Malaysia
84(1)
3 India
85(1)
B Extent and Quality of Disclosures
86(1)
1 Singapore and Malaysia
86(1)
2 India
87(1)
3 Hong Kong
88(1)
C Qualitative Evaluation of the Sustainability Reports in Common Law Asia
89(3)
1 Hong Kong
92(2)
2 Singapore
94(2)
3 Malaysia
96(1)
4 India
96(1)
Ill Suggested Reforms
97(6)
A Oversight Mechanism
97(2)
B Sanctions
99(4)
3 Board Gender Diversity
103(39)
I Rationales for Female Directors
104(11)
A Enhances Corporate Governance
105(1)
B Improves Firm Value
106(2)
C Equality Justifications
108(2)
1 Equality of Outcome
110(1)
2 Equality of Resources and Opportunity
111(4)
II Mechanisms to Promote Female Directors
115(18)
A Quota Requirement
115(5)
B Apply or Explain an Alternative
120(4)
C A Combined Approach: Monitoring Disclosure and `Name and Shame'
124(6)
D Setting Targets
130(3)
III State-Owned Enterprises
133(7)
A Malaysia
134(1)
B Singapore
135(1)
C India
136(1)
D Hong Kong
136(1)
E SOEs with No Female Directors
137(1)
F Connected to the Government
137(2)
G Repeat Players
139(1)
IV Conclusion
140(2)
4 Constituency Directors
142(28)
I German Co-determination
143(19)
A Costs and Benefits
145(1)
1 Costs
145(4)
2 Benefits
149(3)
B Adoption by Other Jurisdictions
152(1)
1 Singapore
153(3)
2 Malaysia
156(3)
3 Hong Kong
159(2)
4 India
161(1)
II Indian CSR Board Committee
162(6)
III Conclusion
168(2)
5 Stewardship Codes
170(36)
I Emergence of Stewardship Codes
172(3)
II Stewardship Codes and Sustainability
175(13)
A Rationales
175(1)
1 Singapore
175(1)
2 Malaysia
176(4)
3 Hong Kong
180(1)
B Contents
180(3)
C Compliance Structure
183(2)
D Scope
185(3)
III Controlling Shareholders
188(8)
A How the Code Reinforces the Power of Controlling Shareholders
188(1)
B How Controlling Shareholders' Presence and Power Are Likely to Disincentivise Institutional Shareholders from Actively Engaging with the Company
189(1)
1 Formal Power
189(4)
2 Informal Power
193(1)
C Conflicts of Interest between the Controlling Shareholder (or Its Company) and the Institutional Shareholders
194(2)
IV Fiduciary Duties of Institutional Shareholders
196(8)
A First Interpretation
196(3)
B Second Interpretation
199(1)
1 The First View
199(3)
2 The Second View
202(1)
C Third Interpretation
202(2)
V Conclusion
204(2)
6 Directors' Duty to Act in the Best Interests of the Company
206(29)
I Shareholder Primacy, Stakeholder Value, and Long-Term Value and Viability
208(9)
A Shareholder Primacy
208(4)
B Stakeholder Value
212(3)
C Long-Term Value and Viability
215(2)
II Evaluation of the Law in the Four Asian Jurisdictions
217(11)
A India
217(3)
B Hong Kong
220(3)
C Singapore
223(2)
D Malaysia
225(1)
E Lessons
226(2)
III Implications of Directors' Best Interest Duty for Corporate Governance Mechanisms
228(4)
A Sustainability Reporting
228(1)
B Stewardship Code
229(2)
C Constituency Directors
231(1)
IV Conclusion
232(3)
7 Liability of Companies, Shareholders and Directors
235(49)
I Rationales for Limited Liability
237(5)
II Existing Exceptions to Limited Liability
242(19)
A Distinguishing Limited Liability and Separate Legal Personality
243(3)
B Piercing the Corporate Veil
246(1)
1 Singapore and Hong Kong
247(2)
2 Malaysia
249(1)
3 India
250(2)
C Breach of Duty of Care by Parent Companies
252(9)
III Proposed Exceptions to Limited Liability
261(6)
A Enterprise Liability
261(3)
B Liability on Shareholders of the Wrongdoing Company
264(3)
IV My Proposal
267(10)
A Imposing Liability on the Controlling Shareholder
267(7)
B Liability in Networks
274(3)
V Breach of Public Interest Legislations
277(5)
VI Conclusion
282(2)
8 Conclusion
284(5)
Appendixes
Appendix 1 External Assurance
289(13)
Appendix 2 Top Fifty Listed Companies in Each of the Four Jurisdictions
302(8)
Appendix 3 Qualitative Assessment of Sustainability Reports
310(50)
Appendix 4 Good Examples of Diversity Policy Disclosure
360(5)
Appendix 5 Proportion of Female Directors
365(6)
Bibliography 371(23)
Index 394
Ernest Lim is an associate professor at the Faculty of Law, National University of Singapore. He obtained his doctorate from Oxford. He has published widely on corporate law and governance. He practised corporate and securities law in New York and Hong Kong prior to entering academia. He is the author of A Case for Shareholders' Fiduciary Duties in Common Law Asia (Cambridge, 2019).