I just wrote a research thesis on corporate governance and foreign investment and I reach similar conclusions. Apart from passive investing, I would also argue that activism has a monitoring cost which some are not willing to take on due to the "free-rider" problem...
I would also argue that the important role played by Governance can be verified in the fact that investors from developed markets carry a home-equity bias due to differing standards and notably a lack of trust in enforcement in foreign countries. Thus, well governed firms can stand out vis-à-vis poorly governed ones...