Asian Development Bank

Improving corporate governance

The Asian Development Bank supports investment funds in its Developing Member Countries partly because funds can have far-reaching impacts on corporate governance. Funds employ long-term sophisticated investors with sufficient capital to influence the market environment. The Lombard Asian Partners Investment Fund (LAPIC) is an excellent example.

Lombard Asian Partners Investment Fund (LAPIC)

LAPIC takes a significant minority stake of between about 20-49 percent in investee companies, requiring 1-2 seats on the board, and working closely with the management to reform and modernize the companies.

LAPIC recently invested in a securities dealing house on the verge of bankruptcy after the Asian financial crisis. Company management listened to the foreign shareholder and reformed the composition and procedures of the board of directors. Their example is observed as a model by other companies.

LAPIC is cosponsored by California Public Employees Retirement System (CalPERS), which is very active in promoting good corporate governance.