1 1 Affirmative action and corporate development in Malaysia and South Africa Hwok-Aun Lee 1 and Lumkile Mondi 2 1 Institute of Southeast Asian Studies (ISEAS), Singapore 2 University of the Witwatersrand, Johannesburg This paper appears as a chapter in the Handbook of the International Political Economy of the Corporation (edited by Christian May and Andreas Nölke), Edward Elgar. Introduction Malaysia and South Africa conduct two of the most extensive affirmative action programmes in the world, and perhaps most distinctively, the policy encompasses the corporate sphere. Affirmative action seeks to promote the upward mobility of a population group – often designated by race, ethnicity, religion, gender or disability – through preferential treatment, in order to increase their participation in areas in which they are under-represented. The policy beneficiary in both countries constitutes the demographic majority and politically dominant ethnic group, namely, the Bumiputeras in Malaysia and blacks in South Africa. While various countries implement affirmative action in higher education, public sector employment and public procurement, fewer pursue such policies in ownership, control and management of corporations. This chapter provides a comparative overview of affirmative action in corporate development in these two countries. We survey political economic foundations, institutional frameworks and policy instruments, and discuss recent policy initiatives and future prospects. Fundamentally, the policy emerged and became embedded in Malaysia and South Africa as a result of political imperatives, constitutional authorization, and socio-economic disparities and stratification that compelled robust action (Lee 2016). The case for affirmative action in corporate development rests on structural inequalities or past systemic discrimination that can entrench the disadvantages faced by groups lacking wealth and facing obstacles to upward mobility, especially to the topmost management and executive positions. 1 A socio-economically disadvantaged group’s occupation of executive, management and professional positions in corporations demonstrates the group’s ability to reach such high positions, providing signals to group members and empowering them to further develop capability and confidence. This economic rationale underpins interventions in both countries, to promote Bumiputera and black ownership, control and management of corporations. Unsurprisingly, the policy is also driven by vested interests, given that political and bureaucratic elites, due to both their connections and their capabilities, stand to benefit richly from the allocation of wealth and powerful positions. Added to these political complications, the policy in practice is also difficult to execute due to the shortage of experienced persons to undertake major leadership roles and the challenges of monitoring the performance and integrity of beneficiaries. The strong impetus, policy salience and practical complexities of affirmative action in corporate development shape our consideration of the Malaysian and South African experiences. The overarching question is not whether these countries should implement affirmative action. Rather, it is more pertinent and meaningful to ask: how is it being pursued and how effective are the programmes and instruments? In principle, the policy should be temporary; its success equates with redundancy, such that preferential treatment becomes unnecessary and unjustified. Genuine empowerment of Bumiputeras and blacks in ownership and management, we argue, is essential for affirmative action to achieve its purpose and for further reforms and roll-back of preferential treatment to be viable. Exit strategies, or transition