Introduction
A considerable amount of research has been devoted in recent years to the role of corporate governance and the ways in which corporate managers are monitored. Most have studied countries with relatively developed financial markets such as the US, the UK, Germany, and Japan, often focusing on the differences between them. It is important, however, to develop a better understanding of corporate governance in emerging markets because of their growing share in world markets and since, in recent years, US and other foreign investors have earmarked increasing amounts of funds to portfolio investment in emerging markets. In 1996, such investment exceeded 90 billion dollars, a sum 15 times greater than in 1990. During this period, the foreign stock component of US investors' portfolios doubled from 3 to 6 percent.