Thai Bourse To Launch A New CG Guideline And Encourage Higher Corporate Social Responsibility

The Stock Exchange of Thailand (SET) will issue new good corporate governance (CG) guidelines for listed companies. Promotion for greater understanding and implementation of these new guidelines will follow, focusing on the SET100 companies first. Listed firms will be asked to disclose their compliance to the new CG guideline in their annual information disclosure forms (form 56-1) and their annual reports starting from 2007.

The SET announced that its CG Center would issue new CG principles for listed firms in 2006, for the directors and management of listed companies to use in improving their companies’ CG up to international standards.

The new CG principles, 2006 edition, have been adjusted to become more in line with those of the OECD (Organization for Economic Co-Operation and Development).

To stress the importance of social responsibility, the SET will create a culture of corporate social responsibility (CSR) along with promoting the new CG guidelines.

To promote a greater awareness and active implementation of the principles, the SET will hold seminars and other activities in conjunction with organizations such as the Listed Companies Association and the Securities Analysts Association.

Also, the SET will continue to send its CG advisory team to advise listed companies. Select service for certain types of organizations, e.g., state enterprises, banks, existing listed companies, and potential listed firms will also be ongoing. The SET plans to conduct its CG promotion among the SET100 companies first.

Furthermore, the SET will continue to support the Thai Institute of Directors’ CG assessments by granting awards and privileges to the top 10 companies. The SET will promote CG among students as well, and is collaborating with Thammasat University in producing an undergraduate text and teaching manual.

Having a CG system in place is good for a company, whilst generating greater trust by investors, shareholders and other parties. The new set of CG principles is aimed at helping the listed companies better fulfill these objectives.

The SET also hopes to raise the standard CG ratings. For SET50 companies, their average CG ratings will have a targeted rise from 76 to 80. For other companies, the average rating is hoped to rise from 69 to 75. With several CG promotion activities, it is believed that these targets will be met.

The listed companies’ directors and management should adopt the SET’s CG guidelines in. If any firm cannot comply with any of the principles, it should clarify why it can’t do so in its annual information disclosure form and annual report and state their alternate policy.

The SET’s promotion on its new CG guidelines will be implemented through 2007’s information disclosures and onwards.