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Companies need to come clean

Asia needs to air its corporate dirty linen in public, even if that means losing face, if it wants to clean up the standard of its business practices, according to prominent Asia watcher Michael Backman.

Backman, the author of several books on the region including Asian Eclipse: Exposing the Dark Side of Business in Asia, published in 1999, said although the quality of corporate governance in Asia has improved since the 1997-1998 financial crisis there is room for improvement.

And solutions should be sought from the US -- the land of the Enron and WorldCom scandals, he said.

"Because of WorldCom and Enron, the US is even better," said Backman, in Singapore to promote the book Big In Asia which he co-authored.

With the exception of Indonesia and to a lesser extent Thailand, Asia has made significant efforts to introduce more transparency into the corporate sector and lift the standard of business practices, he said.

"It depends on each country but generally I am encouraged," he said.

"Before the [1997-1998] economic crisis, very few countries in the region even understood what corporate governance was," he said.

Backman cited Singapore's move towards releasing corporate earnings on a quarterly basis and the restructuring of some of Malaysia's biggest business conglomerates, as examples of some of the improvements.

But while "there is no doubt" Asia is now a better place in which to invest than it was five years ago, there remains plenty to be done and the US corporate model is where Asia should look despite its corporate scandals, he said.

"The beauty of Enron is that we all know about it and there has been a fair amount of transparency and the screw up that it was," he said.

"In a way it does [show the transparency]" of the US corporate sector.

"When you see what they did with Enron ... senate inquiry, regulators looking at how they can improve ... in the United States, there is a real culture of celebrating dirty linen."
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