Greenspan (1999), Chairman of the Board of Governors of the Federal Reserve System, in his address to the World Bank Group and International Monetary Fund points out that weak corporate governance is one of the causes of the East Asian financial crisis of 1997 to 1998. We examine the period return of all the listed companies except for those belong to financial industry in Taiwan during the domestic crisis (PIL event) to find how corporate governance affects a firm’s value, especially in such a crisis. Besides, we also examine whether there is a difference in the effectiveness of corporate governance between Taiwan and East Asian countries. The report released by McKinsey & Com-pany (2000) points out that investors are willing to pay for the shares of well-governed companies a premium of 18% to 28%. In our study, the evidence we find also strongly supports the viewpoint that firms with good corporate governance would have higher per-formance in cumulative stock returns than those without it during a crisis. Nowadays corporate governance is getting more attention than ever. Also we deeply believe its value would highlight much more over time, especially when firms confront the impact of crisis.

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