New corporate governance principles aimed at readying for AEC
The Stock Exchange of Thailand has recognised that good corporate governance is an essential character of listed companies. It means the company is efficient and transparent, with management systems that can be audited to create trust and confidence among its shareholders, investors, other stakeholders and all relevant parties.Good corporate governance is a way to add to a firm's value and sustain its growth.
The need for integration of regional capital markets is increasing. Asean's capital markets individually are small, with limited range of products and services. The capital markets' integration will help broaden the investor base and range of products, especially strengthening domestic capital markets and providing liquidity to compete with others.
Since 2002, the SET has proposed the "15 Principles of Good Corporate Governance" as preliminary guidelines for listed companies.
In 2006, the principles were revised to be comprehensive and comparable to the Principles of Corporate Governance of the Organisation for Economic Cooperation and Development. This version also includes the recommendations made by the World Bank in its "Report on the Observance of Standards and Codes" related to corporate governance in Thailand (CG-ROSC).
Last year, a revision of the 2006 principles was made. The changes pertained to best practices contained in each of five categories to be compatible with Asean Corporate Governance Scorecard criteria. The scorecard will be used as the core criterion to evaluate and rank the CG of Asean listed companies.
The objectives of the scorecard and the ranking exercise are to:
- Raise corporate-governance standards and practices of Asean public limited companies;
- Showcase and enhance the visibility as well as investability of well-governed Asean PLCs internationally; and
- Promote Asean as asset class.
This revision aims to make the Principles of Good Corporate Governance more in tune with the changes in the capital-market world.
It also aims to take the quality of listed companies' corporate-governance practices to a higher level. Furthermore, the revision encourages listed companies to be ready for competition within Asean.
The SET has received a considerable amount of valuable input from listed companies, both through their self-assessments and by their comments during panel discussions at hearings. The Office of the Securities and Exchange Commission and the Association of Listed Companies also provided their collective feedback at another panel meeting. The SET took all of these insightful contributions into consideration when finalising the latest version of the principles of good governance so that they are compatible with the Thai business environment.
Further to this effort, the SET plans to hold activities throughout the year on improving corporate governance, such as quarterly CG forums, workshops on corporate-governance report assessment, and a development programme consulting the CG practices in substance.
These will underline the long-term development plan to improve the capabilities of all capital-market |participants sustainably and |continuously.
The first quarterly seminar was on "What Are the New Good CG Principles for Listed Companies in 2013?" Ten workshops on corporate-governance reports were scheduled for the quarter.
The SET expects all listed companies' boards and management teams to develop their systems to be comparable with international standards. This will be beneficial to the growth of listed companies, the growth of the Thai capital market and the sustainable development of the economy.
Bordin Unakul is executive vice president and head of the corporate services division, Stock Exchange of Thailand.