WB says Thai state enterprises need better governance
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Thailand is making significant improvements in corporate governance, says the World Bank, while voicing concern about poorer governance in state enterprises such as PTT and Government Savings Bank.
Thailand is a regional leader in corporate governance with a relatively comprehensive framework and has achieved a high level of compliance in a number of key areas, stated the World Bank’s Report on the Observance of Standards and Codes (ROSC) released yesterday at the “SEC for CEOs Forum” hosted by the Securities and Exchange Commission.
Thailand obtained a score of 82.83 points from a possible 100, receiving the highest score in the disclosure and transparency areas, according the ROSC conducted by the World Bank last year.
Speaking at the forum, David Robinett, senior private-sector development specialist at the World Bank, said Thailand had succeeded in reforming its laws and regulations related to the issue.
Moreover, private enterprises are actively participating in the process of implementing best practices.
However, Thailand is facing many challenges, including a need to reform state enterprises to make them transparent and efficient, Robinett said. There is also a need to treat shareholders equally, as currently minor shareholders are taken advantage of by control shareholders or owners of the corporations.
In the structure of Thai firms, there is also no clear rule on who is a control shareholder, which needs to be addressed.
Meanwhile, the independence of the Bank of Thailand and the SEC must be ensured. These institutions and the Finance Ministry need to work closely with one another to ensure the effective upgrading the country’s good-governance practices, according to Robinett.
Regarding the challenge to reform state enterprises, he suggested that the boards of state enterprises such as PTT should have more professionals instead of large numbers of civil servants.
“PTT could perform much better if it employed more professionals to its board,” he said, adding that Government Savings and Government Housing banks should also reform their management and possibly list on the stock market.
Vorapol Socatiyanurak, secretary-general of the SEC, said there was still a lot of work to do to improve corporate governance, particularly how Thai firms could uphold green business practices, since pollution had become a global issue that threatens the survival of human civilisation.
