1. 4th OECD Asian Roundtable on Corporate Governance: Promoting Shareholder Participation Vincent Duhamel State Street Global Advisors November 2002

2. Corporate Governance Affects Company Valuation  Arm’s length vs. relationship models  Transparency and trust  Discounted “local valuation”  Adverse selection  Adopting and enforcing international accounting and disclosure standards

3. Impediments to Shareholder Participation  Legal/regulatory: lax enforcement of “one share, one vote”  Complex, cumbersome voting logistics and procedures  Language translation issues  Tight time schedules  Re-registration of shares  Physical presence at AGM sometimes required to vote

4. Removing Impediments  Government review of company laws and protection of shareholder rights  Consideration of allowing electronic communication of voting instructions  Commercial corporate governance services offered over the Internet  Pension fund activism creating pressure for increased disclosures

5. Government Reform Priorities  Separation of management and ownership  Enhance quality of listed companies and investors  Ensure independence and competence of directors and intermediaries  Establish “fiduciary culture”

6. Communicating to the Investment Community  Government/regulatory -- dialogue and consultation with companies, investors, other market players  Investors -- relationship investing, quiet diplomacy and proxy voting, working with trade groups, stock exchanges  Companies – develop transparency procedures; disclosure all relevant information to all interested parties; build investor relations discipline  The press – facilitate honest public disclosure by identifying and exposing abuse

7. Outlook  Private-public partnership of companies, investors, financial industry players, government and regulators establishes effective, workable best practices  Globalisation and public-private partnerships will drive a harmonisation of standards across markets  Harmonisation will reduce compliance costs; remove barriers to competitors and innovation  Resulting investor protection will increase market confidence, opportunities, access and participation