Are conglomerates good or bad?

IN most developed capital markets, conglomerates trade at a discount. Yet this does not appear to be the case in many Asian markets, despite the fact that conglomerates are more difficult for boards to govern than other forms of organisations.

Although the reasons for the discount exist in Asian markets, perhaps the fact that some conglomerates may attract better talent than single line-of-business companies or are better connected is enough to compensate for the inherent governance disadvantages conglomerates face. What this does is to put even more pressure on the boards of conglomerates to really understand what is going on under their watch, making an already challenging job even more difficult.