Under the topic, “The World Bank’s Views on Thai CG and Future Directions of the Thai Capital Market,” the CG seminar discussed the World Bank’s recent Corporate Governance Assessment Report on the Observance of Standards and Codes (CG-ROSC) of the Thai capital market to give market participants a clearer view of their positions in the international community and guidelines of good governance practice to increase their competitiveness.
The CG-ROSC report indicates that Thailand has largely observed 69 percent and partially observed 31 percent of the World Bank’s criteria ranging from CG framework to roles of market participants.
“We did particularly well in the area of overall CG framework, which means a good start for solid CG developments and better prospects for the Thai economy in the globalized market,” said Dr. Somkid Jatusripitak, Deputy Prime Minister and Minister of Commerce.
“Good CG is a stamp of quality, particularly in the eye of the international community. Better CG practice, therefore, increases investors’ trust and confidence in the Thai capital market. Now that we know where we stand, we can step forward with a clearer focus and fine-tuned strategic plans to improve CG practice across the market and achieve the national goal of becoming the regional hub of investments in 3 to 4 years,” he added.
The National Corporate Governance Committee, chaired by Prime Minister Thaksin Shinawatra, has led cooperative efforts to establish strong CG culture in the Thai capital market. Among tangible initiatives are CG training and award presentation, regulations enactments and amendments, law enforcement, and international accounting standard compliance.
“The government has spearheaded the CG mission and it is beginning to pay off. The World Bank’s report is an encouraging proof of progress. Still, market participants must get better prepared for cross-border activities and tougher competition in the globalized market. That’s why we need to see the private sector be more proactive in raising their operational standards based on international corporate governance principles,” Dr. Somkid said.
“Thailand's voluntary participation in the World Bank’s assessment process marked the country’s readiness to be evaluated against international standards. Market participants, public and private alike, were very cooperative in providing us with requested information," said Mr. Behdad Nowroozi, Regional Corporate Governance Coordinator, East Asia and Pacific Region, the World Bank, and the lead author of the report.
He added, “Our assessment is that Thailand has made serious progress in improving corporate governance, especially in issuing codes and regulations and training of directors. Thailand, however, faces significant challenges to deepen its capital market and strengthen corporate governance by continuing to improve protection of shareholder rights, completing the legislative and regulatory agenda, ensuring tougher law enforcement, enhancing financial reporting and disclosure, and promoting business ethics and best practices.
"Improving corporate governance is a long process and requires cooperation among all market participants, including regulators, creditors, auditors, directors, shareholders and stakeholders. But if Thailand aims to stay competitive and integrate its capital market at the regional and global levels, good governance is a priority," said Mr. Nowroozi.
Dr. Kongkiat Opaswongkarn, Chairman of the Federation of Thai Capital Market Organizations, said: “The world economy has seen increasing market volatility over the past few years. This urges foreign institutional investors to adjust their investment portfolios and seek new potential markets. The timing couldn’t be better for the Thai capital market to show its CG improvements complying with international standards. And the satisfactory total score from the CG-ROSC report certainly is our competitive edge to attract foreign investors.
“I would like to urge our market participants to seriously implement global CG principles. In the long run, lasting benefits will be worthwhile to shareholders, stakeholders and the Thai capital market as a whole,” he added.
