Melbourne Law School - Theses

Permanent URI for this collection

Search Results

Now showing 1 - 2 of 2
  • Item
    Thumbnail Image
    Corporate governance in the Indonesian capital market: a legal-sociological study of legal culture
    Tabalujan, Benny Simon ( 2000)
    This thesis examines corporate governance in the Indonesian capital market during the 1990s. The key elements of corporate governance used are: transparency, accountability and predictability. After sketching the salient features of the Indonesian corporate sector, detailed case studies on three banks are undertaken focusing on critical junctures in their corporate lives: Bank Duta (1990); Bank Summa (1992); and Bank Pikko (1997). Since banks are highly regulated entities in Indonesia, studying their corporate governance experience provides a good benchmark of Indonesian corporate governance. The case studies reveal that the written rules on corporate regulation were often not complied with. This finding casts doubt on the effectiveness of corporate law reform initiatives undertaken during the 1990s, including the recent 'rush to law' following the 1997-1999 Asian financial turmoil. To explain the discrepancy between the written provisions and actual practice of Indonesian corporate governance, I create an analytical model based on the sociological concept of legal culture. This model incorporates the work of Lawrence M. Friedman (Stanford University) on legal culture and the work of Ugo Mattei (University of Trento) on patterns of law. According to this model, law reform which targets only changes in legal institutions and substantive written law is unlikely to be effective. This is because legal culture - the third and most important aspect of any legal system - has not been addressed. I then refine the model by identifying two key components of legal culture. I refer to them as legal habit and legal consciousness. Thereafter, I analyse Indonesian legal culture through its legal habit and legal consciousness. The analysis reveals a legal culture that is dominated by two contradictory trends: a conservative trend based on traditional cultural values (patrimonialism); and a progressive trend driven by economic development imperatives (developmentalism). The conclusion which emerges is that past Indonesian corporate governance reforms, despite introducing major changes in legal institutions and substantive law, have not succeeded because of an unreceptive legal culture torn between patrimonialism and developmentalism. I then offer suggestions as to how this tension can be managed so as to create a corporate governance system which respects Indonesia's unique cultural heritage. If these findings can be extrapolated, they highlight the significance of local legal culture for corporate governance reform in emerging and transitional economies. This has important policy ramifications for corporate law reform in these countries.
  • Item
    Thumbnail Image
    Corporate legal advisers of state-owned enterprises in the People's Republic of China: the developing watchdogs
    Poon, Kai Cho ( 2010)
    This thesis critically assesses the design and operation of the corporate legal adviser (“CLA”) system for state-owned enterprises (“SOEs”) in the People’s Republic of China (“PRC”). The study of in-house legal advisers (commonly known as corporate counsel) in Western jurisdictions has developed as its own subfield of studies of the legal profession. That literature shows that the roles that in-house legal advisers in Western corporations should and can play is heavily influenced by their corporate environments, corporate policies and attitudes of the corporate leaders with whom they work. There are a range of complex organizational and ethical issues faced by Western corporate counsel in discharging the functions of effective gatekeepers, advisers and preventive law practitioners. However, as compared with the abundant published works on corporate counsel in the era of post-Enron corporate America, there is little academic literature on in-house legal advisers in China. In the face of the challenges and risks caused by the intensifying economic reforms in the PRC since the early 1990s, and China’s entry into the WTO in 2001, the PRC Government has been attempting to strengthen measures to preserve and protect those state assets that are managed and operated through SOEs. The supervisory body for SOEs is the powerful and well-known State-owned Assets Supervision and Administration Commission (“SASAC”) which is directly under the control of the State Council. SASAC has perceived that corporate counsel in Western corporations have been playing a critical role in corporate risk management and decision-making, and have been accorded a high status within their organizations. Therefore one of the measures implemented by SASAC under its risk management framework for SOEs is the CLA system. The CLA system requires SOEs to engage licensed CLAs as part of the corporate governance and risk management system. Pursuant to the Administrative Measures for State-owned Enterprise Corporate Legal Advisers (2004) (the SASAC document governing the system), the role, rights and obligations of CLAs are set out. The policy objective is to ensure that SOEs are managed and operated in compliance with law and with proper legal advice. SASAC leaders have claimed that the CLA system in SOEs has made great achievements in improving the risk management performance of SOEs. However, this thesis finds that SASAC has not properly addressed the ethical and role dilemmas commonly faced by Western corporate counsel. On the basis of the Western literature on corporate counsel and analysis of SASAC’s policies and the practice of SOEs, this thesis identifies the following key concerns with the CLA system of SOEs: the status and independence of CLAs, the qualification system for CLAs, the legal and professional regulation of CLAs, and the management structure and corporate culture of SOEs where CLAs work. Finally, the inherent problems caused by the power structure in SOEs, especially the role of senior cadres of the ruling Chinese Communist Party in SOEs, has not been resolved. This thesis concludes that CLAs as corporate watchdogs in SOEs are still at the developmental stage. More empirical research of CLAs of SOEs is warranted to better understand how China, as an emerging world economic power, is to play on the international stage.