Thailand rises to 3rd in Asia in corporate governance
The Stock Exchange of Thailand's ranking on corporate governance has moved up one place to third in Asia, which is better than Japan, but law enforcement remains weak according to Corporate Governance Watch 2012, Vorapol Socatiyanurak, secretary-general
Singapore’s and Hong Kong’s exchanges ranked first and second, according to the report by the Asian Corporate Governance Association and CLSA Asia-Pacific Markets Securities, which rank capital markets in terms of the transparency of 11 stock exchanges in Asia.
Thailand’s upgrade was due to improvements in four of five areas, according to the report. The SET ranked fourth in 2010.
The four areas where improvements were noted were: information disclosure by listed companies and tough auditing rules; rule enforcement within the private sector; accounting and auditing; and overall corporate-governance culture.
In the first category, listed companies’ ability to disclose financial information within 60 days raised the score. Also, shareholder meetings were well organised, Vorapol said.
The report urged Thai firms to disclose other information besides their financial positions.
Thailand has shown no improvement in the political and regulatory environments over the past two years, the report said.
“A key challenge in Thailand remains the inefficient and corrupt prosecutorial and judicial process, with criminal complaints filed by the SEC taking years, often more than a decade, to reach any conclusion,” it said. “Of 93 criminal complaints filed by the regulators against alleged offenders between 1992 and 2011, only 11 have been punished to date.”
On the plus side, anti-corruption campaigns among the private sector were seen as an encouraging sign of corporate-governance culture, though it remained to be seen whether the campaigns would bear fruit. Participation of the private sector is essential for a successful fight against corruption, the report said.
Vorapol said: “Improving corporate governance will [attract] both local and foreign investors, as they will be interested in transparent firms. Some foreign funds invest only in listed firms approved on their corporate governance.”
Bandid Nijathaworn, chief executive of the Thai Institute of Directors, said the country still faced the challenge of getting rid of widespread corruption.
