Abstract Unlike the dispersed-ownership systems common in Western markets, corporate governance in China, South Korea, and Japan is distinctively characterised by insider control exercised through Party-state influence, family control, and cross-shareholding networks. These structures strongly shape how sustainability is implemented at the firm level. Although all three jurisdictions have adopted Environmental, Social, and Governance (ESG) reforms, their effectiveness has been constrained by concentrated decision-making and limited opportunities for stakeholder influence, particularly for institutional investors. This article challenges assumptions of global convergence in corporate governance by showing that ESG initiatives often coexist with entrenched insider control, resulting in only partial or symbolic adoption. Drawing on agency cost theory and case studies of major firms, this article demonstrates how region-specific insider control structures constrain the effectiveness of investor-led sustainability efforts. To address these challenges, the article advances two avenues for reform: incentivising insider controllers to internalise sustainability and gradually reducing their dominance by diluting entrenched control and strengthening the role of non-controlling shareholders. The article also contributes to comparative corporate governance scholarship by conceptualising how insider control shapes ESG trajectories in East Asia and by identifying alternative pathways towards long-term corporate accountability and sustainability.
Pangyue Cheng (Mon,) studied this question.