.jpg)
A recent report rated corporate governance (CG) among 216 Thai listed companies’ as ‘good’ to ‘excellent’, scoring highest in Disclosure and transparency. SET50 companies scored above average, with the leading industries being in Resources, Financials, and Technology.
“Corporate Governance Report of Thai Listed Companies 2006” was launched at a seminar co-hosted by the Investors Education, Public Relations and Corporate Governance (CG) in Thailand Sub-committee, National CG Committee, in conjunction with The Stock Exchange of Thailand (SET), Securities and Exchange Commission, and Thai Institute of Directors (Thai IOD). The report has been produced by Thai IOD for the past five years, SET Chairman Mr. Vijit Supinit (who also chairs the sub-committee above) said.
Detailed results showed significant progress in CG among Thai public firms, with an average score of 71 (on a 100 point scale), up from 69 in 2005. Disclosure and transparency averaged 82, while Equitable treatment of shareholders scored 75, and a greatly improved Rights of shareholders leapt from 66 to 71. Board responsibilities also advanced from 53 to 58.
The three industries with best scores are: 1) Resources Group, with an average of 81, led by the Energy Sector; 2) Financials Group, with 75, led by the Banking Sector; 3) Technology Group, at 73, led by the Communication Sector.
Large companies in SET50 Index scored above average, at 81, up from 79 in 2005. Small and medium-sized companies averaged 72 and 68 respectively.
Mr. Vijit noted that over the past five years, the report promoted awareness among listed firms and motivated them to implement CG. The next step is to establish a healthy CG culture, where the principles are adapted to each corporation, and their stakeholders benefit noticeably.
“Although quantitative improvement was restricted by a tighter assessment, the report demonstrates that, qualitatively, Thai listed firms did well in several aspects. However, there is still room for improvement in areas such as the roles of directors, and their responsibilities to stakeholders, society and the environment,” Mr. Vijit said.
Each year, the report notes that the CG scores of Thai public companies are improving, as an increasing number of companies give CG a higher priority. This year’s assessment scale has been refined from the previous four levels into six, according to companies’ CG scores — excellent, very good, good, satisfactory, pass, and should try harder. This year nine achieved ‘excellent’, 62 ‘very good’, and 145 ‘good’, sub-committee secretary Ms. Sopawadee Lertmanaschai stated.
Thai IOD assessed data from 402 companies listed on SET and Market for Alternative Investment (mai) using criteria based on the OECD principles: 1) Rights of shareholders; 2) Equitable treatment of shareholders; 3) Role of stakeholders; 4) Disclosure and transparency; and 5) Board responsibilities, Thai IOD President Mr. Charnchai Charuvastr said.
Thai companies did especially well in Rights of shareholders. Nearly all hosted a shareholders’ meeting with proper notification of shareholders, dealt well with those not present, clearly disclosed important information in their annual reports, and appointed audit committees as required.
“Useful recommendations from the report include that firms distribute meeting invitation letters via websites, improve shareholders’ meeting reports to better reflect the conduct of the meeting, e.g., board members present, voting results, provide for shareholders to nominate board members, and disclose information about how the company treats shareholders,” Mr. Charnchai concluded.
