New legal research confirms the true and fair requirement extends across Asia-Pacific

GAIL has partnered with Social Value International (SVI), through its flagship campaign the True & Fair Project, to publish new legal research examining how the “true and fair” requirement — a long-standing feature of company law — operates across five jurisdictions in the Asia-Pacific region.

The research, produced by nine lawyers from GAIL’s APAC regional network, finds that in four of the five jurisdictions, this requirement functions as a substantive legal obligation – one that sits above and alongside accounting standards. Where sustainability-related risks and impacts are financially material, the research confirms they are relevant to whether a company’s financial statements give a true and fair view.

Lawyers in Australia, Japan, Hong Kong, Malaysia, and Singapore examined how “true and fair” (or equivalent legal concepts) appear in their jurisdictions. We are grateful to the following nine lawyers for their rigorous and detailed analysis:

• Joseph Chun, Sherman Ho, and Walter Yeo (Singapore)
• Michael Ryland, Jon Cheung, and Allison Strickland (Australia)
• Vivien Teu (Hong Kong)
• Sotaro Hotta (Japan)
• Farez Jinnah (Malaysia)

The research in each jurisdiction answers five key questions:

• Where does the duty sit in law?
• How is it interpreted in practice?
• Are there comparable concepts or overrides of accounting standards?
• Which authorities provide guidance?
• How might it extend to sustainability and non-financial reporting?

The research builds on a 2024 UK legal opinion and subsequent research covering EU jurisdictions, extending a growing global picture of how existing law already invites directors to consider the full costs of doing business.