IOD seminar conveys importance of good corporate governance
Good corporate governance could lead to strong, sustainable growth of the economy and more enterprises if its executors have transparency and allow stakeholders to increase their participation in organisations, it was asserted at a Thailand Institute of D
Speaking at the IOD’s fourth national directors’ conference under the topic of growth and governance, Banyong Pongpanich, chief executive officer of Kiatnakin Phatra Financial Group, said investors were key drivers of good corporate governance and if Thai listed companies did not have sufficient governance, they would not attract investors.
Therefore, he said investor stakeholders played an important role |in enhancing corporates |by improving governance.
He said corporates must have transparency and allow stakeholders to have more participation in their affairs.
Thailand has witnessed a slowdown in growth for many years because the economy was driven by unsustainable policies, he said.
The participation of stakeholders in an organisation helps counter such negative influence.
Banyong said there were three indices linked to a country’s growth: corruption, gross domestic product and democracy. Democratic countries with low corruption had high GDP.
He said small and medium-sized enterprises should give importance to governance because it helped them access bank loans and bankers were able to reduce credit costs when lending to SMEs that had good governance.
Kosit Panpiemras, executive chairman of Bangkok Bank, said governance should be executed over a long period and connecting governance to growth required the proper formula.
"The concept of governance in the short term and the long term should not the same.
"The major issue for governance is how we can be patient and have the long-term execution of governance," he said. For that to happen, management must cooperate, he said.
Quality mechanism
The country’s growth is driven by the private sector, so the private sector has an important role in developing quality mechanisms in society including governance, he said.
Boonkiet Chokwatana, executive chairman of ICC International, said good governance had a positive impact on investor confidence, and several institutions including the |IOD had encouraged |the practice by giving awards.
"We should have laws that penalise corporates with low governance as this would help them pay attention to their governance," he said.
