Corporate governance model of a state-owned enterprise: evidence from an Asian emerging market

Abstract

Purpose

The purpose of this study is to examine a state-owned enterprise corporate governance model in an Asian emerging market. Corporate governance has attracted much attention and is still a hot topic among shareholders, directors and company regulators. Failure of large corporations in the past decades not only affected the shareholders and investors, rather it adversely affects all the stakeholders. Good corporate governance practices are argued to curb company’s failures due to fraudulent activities, collusion schemes and mismanagement.

Design/methodology/approach

The study took the qualitative approach. It utilized case study method. The company is designated as Company R, as the study is not allowed to reveal the company’s real name.

Findings

The study found that the corporate governance structure of the board is of unitary or one-tier board, which is common in the Anglo-American settings. The board members are selected and appointed by the government. They are chosen from highly capable and trustworthy government officers to represent and safeguard the government’s interest in the company. As for the ownership structure, it is a typical company with the other Asian state-owned enterprises where the state has full ownership and control of the company.

Originality/value

The study fills the gap in the corporate governance model literature, especially in the context of Asian emerging economies’ state-owned companies. Furthermore, the authors believe that this study is among the first to examine the corporate governance model in this country. It shed lights on the corporate governance model in terms of governance structure, the ownership and shareholders’ right, roles of the board, regulatory framework and control mechanism and, finally, disclosure and transparency.

Citation

Yaacob, H. and Basiuni, J. (2014), "Corporate governance model of a state-owned enterprise: evidence from an Asian emerging market", Corporate Governance, Vol. 14 No. 4, pp. 504-514. https://doi.org/10.1108/CG-12-2012-0097