Multiple Derivative Action and Common Law Derivative Action Revisited: A Tale of Two Jurisdictions

Purpose – The purpose of this paper was to determine to what extent Hong Kong’s experience proves (or disproves) theories from corporate governance in the areas of family ownership, concentration, self-dealing in Hong, executive compensation and other issues. This paper – written in the comparative corporate governance tradition – uses data from Hong Kong to discuss wider trends and issues in the corporate governance literature. Design/methodology/approach – The authors use the comparative corporate governance approach – exposing a range of corporate governance theories to the light of Hong Kong data. The authors purposely avoid over-theorising – leaving the data to speak for themselves for other researchers interested in such theorising. Findings – The authors find that Hong Kong presents corporate challenges that are unique among upper-income jurisdictions – in terms of potentially harmful (shareholder value diminishing) family relationships, shareholder concentration and self-dealing by insiders. The authors also show that excessive executive compensation, accounting and audit weaknesses do not pose the same kinds of problems they do in other countries. The authors provide numerous comments on theoretical papers throughout the presentation in this paper. Research limitations/implications – The authors chose a relatively unused research approach that eschews theory building – instead, the authors use data from a range of sectors to build an overall picture of corporate governance in Hong Kong. The authors subsequently affirm or critique the theories of others in this paper. Practical implications – The original analysis conducted by the authors provided 22 recommendations for revising listing rules for Hong Kong’s stock exchange. Others – particularly Asian officials – should consider Hong Kong’s experience when revising their own corporate governance listing rules and regulations. Originality/value – This paper offers new and original insights in four directions. First, the authors use the empiricist’s method – presenting data from a wide range of corporate governance areas to comment on and critique existing studies. Second, the authors provide a system-wide view of corporate governance – showing how different parts of corporate governance rules work together using concrete data. Third, the authors provide a new study in the comparative corporate governance tradition – another brick in the wall that is “normal scientific progress”. Fourth, the authors pose tentative resolutions to highly debated questions in corporate governance for the specific time and place of Hong Kong in the early 2010s.

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“…We do not want to turn this brief into a treatise on corporate law. See Goo (2010) for a fuller description.…”

Section: Notesmentioning

confidence: 99%

“…SeeGoo (2010) for a fuller description.47 Kwan and Leung (2012) provide another fine overview of derivative actions in the Hong Kong context.Downloaded by UNIVERSITY OF EXETER At 04:54 20 July 2015 (PT)…”

mentioning

confidence: 99%

Corporate governance and its reform in Hong Kong: a study in comparative corporate governance

Michael

Goo

2015

Corporate Governance

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“…Yet, the continual strength of investor appetite for IPOs in Hong Kong remains. Owing to the influx of Chinese companies, Hong Kong was the champion in IPOs in and 2010(Wall Street Journal, 2009Financial Times, 2011), dwarfing London and New York (see Figure 2). …”

Section: The Rise Of Hong Kong As An Asian Financial Centermentioning

confidence: 99%

Law and Finance: What Matters? Hong Kong as a Test Case

Yeung¹,

Huang²

2012

Asian Journal of Law and Economics

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This paper, using Hong Kong as a test case, challenges one conventional theory and confirms another one in law and finance study: (i) legal families in relation to stock market development; (ii) transplant effect of foreign laws. Economists, most notably La Porta and colleagues, allege that common law systems can offer superior investor protection and thereby facilitate the rise of financial markets. Undeniably, the legal system of Hong Kong, which was inherited from England, belongs to the common law family and is widely considered as one of Hong Kong's advantages. Nonetheless, the high concentration of family ownership among Hong Kong companies implies that its system is not entirely Anglo-Saxon. Moreover, legal scholars, most notably Pistor and colleagues, claim that the import of laws from a developed system (legal transplantation) will have little impact unless there is such a demand in the first place. Interestingly, for Hong Kong, the transformation of a small fishing village in the mid-nineteenth century to a financial serviceoriented economy nowadays is an illustration of the existence of demand in corporate and financial laws. By absorbing the nutrients from English legal traditions, American style of intense public enforcement and the flexibility of Chinese family businesses, Hong Kong has successfully established itself as one of the most crucial financial centers in the world.

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Shareholders' Claims for Reflective Loss in International Investment Law

Vanhonnaeker

2020

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Multiple Derivative Action and Common Law Derivative Action Revisited: A Tale of Two Jurisdictions

Cited by 18 publications

References 3 publications

Corporate governance and its reform in Hong Kong: a study in comparative corporate governance

Corporate governance and its reform in Hong Kong: a study in comparative corporate governance

Law and Finance: What Matters? Hong Kong as a Test Case

Shareholders' Claims for Reflective Loss in International Investment Law

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