Asian Corporate Governance—and the Case of Dual-Class Shares: CARE Conference &7C Hong Kong Polytechnic University &7C June 9, 2014

type="main"> <p>The case of the Alibaba IPO illustrates the divergence of corporate governance standards between the United States and many other markets, and reopens the debate on the one-share one-vote principle. Since corporate governance standards develop in ways that reflect the history and legal and political environments of different countries, we should not expect to see a global convergence of these standards—nor is it generally desirable to transplant policies from one market to another without understanding their historical backgrounds. <p>Nevertheless, the U.S. approach to regulation raises the concern that competition among exchanges will cause issuers to “shop around” and tempt the exchanges to relax their standards in a race to the bottom. While market participants and regulators outside of the U.S. debate whether and how to modify the one-share, one-vote rule, they face challenges in coming up with new rules that strike the right balance between effective corporate governance and market development.