Thai directors support stronger punishment

They prefer to see the penalty for directors culpable of unfair treatment to shareholders, including insider tradin include fine, imprisonment, and a ban from directorship, instead of just being fined as in most cases seen in Thailand.  Absence of a strong ethical corporate culture is also seen by directors responding to the survey as the key factor behind the unethical conduct of directors.

The second annual Thai Director Survey reflects views of directors on issues of their immediate concern. Conducted between March 2016 and May 2016, it drew responses from 416 directors.  Given the diversity of respondents’ experiences, business types, and sizes, the survey is believed to fairly represent the overall views of directors in Thailand.

In the survey, 65 per cent of directors think the current penalty is too light with respect to unfair treatment or taking advantage over other investors such as insider trading and stock manipulation.  Most directors think the punishment for such wrongdoing should include fine, jail term, and disqualification of directorship.

Based on data available on the Securities and Exchange Commission website, the IOD has found that most directors or executives who were found guilty on unfair treatment charges just paid fine but were still able to keep their board seats.  Some cases are repeated offenses.  Penalties should therefore be raised to such levels as to discourage or deter such offences.

“The IOD felt that wrongdoings by directors related with asset malpractices are serious offences that cannot be ignored as they undermine both legal and ethical standards. Therefore, boards should thoroughly probe the persons being nominated for directorship to ensure that they have no prior record of conviction under the Securities and Exchange Act,” said Dr. Bandid Nijathaworn, President and CEO of the IOD.