2013年-世界发展银行全球_Corporate_Governance_Country_Assessment___Thailand_52页_1mb

Summary of the 2013 Corporate Governance Country Assessment (ROSC) for Thailand

Core Content

This report, Report on the Observance of Standards and Codes (ROSC), evaluates Thailand's corporate governance framework in relation to the OECD Principles of Corporate Governance. It updates the 2005 Corporate Governance Report and provides a comprehensive overview of the current state of corporate governance in Thailand, including policy recommendations and a benchmark for investors.

Main Points

What is Corporate Governance?

Corporate governance refers to the structures and processes that guide the direction and control of companies. It involves the relationships between management, the board of directors, controlling and minority shareholders, and other stakeholders. Good corporate governance promotes economic development by improving company performance and access to capital.

Importance of Corporate Governance

Corporate governance is essential for emerging markets as it:

• Reduces financial vulnerability
• Reinforces property rights
• Lowers transaction costs and the cost of capital
• Encourages capital market development
• Preserves retirement savings
• Enhances transparency and efficiency in company operations

ROSC Overview

The ROSC program is led by the World Bank and assesses countries against the OECD Principles. It includes:

• Standardized and systematic assessments
• Policy recommendations and model country action plans
• Focus on listed companies, especially banks and SOEs
• Voluntary participation and reporting

Key Findings

Legal and Regulatory Framework

• Thailand has made significant progress in corporate governance since the 1997 financial crisis, including:
  • Amendments to the Securities and Exchange Act (SEA) 1992
  • New Principles of Good Corporate Governance for listed companies
  • A new Banking Act and supporting regulations
• The Securities and Exchange Commission (SEC) and Bank of Thailand (BoT) are well-resourced and active in enforcement.
• The State Enterprise Policy Office (SEPO) has been working to improve governance in State-Owned Enterprises (SOEs).
• The Thai Institute of Directors (Thai IoD) has pioneered director training and introduced a successful corporate governance scorecard.

Shareholder Rights and Practices

• Basic shareholder rights are well established, and shareholders can freely trade shares, participate in meetings, and receive information.
• Shareholders approve board members, dividends, major transactions, and changes to company articles.
• Pre-emptive rights and withdrawal rights are in place.
• Related Party Transactions (RPTs) require interested shareholders to recuse themselves from voting.
• Shareholders are required to approve anti-takeover devices and receive tender offers when ownership reaches 25%, 50%, or 75%.

Disclosure and Transparency

• Companies disclose:
  • Industry and company trends
  • Director details
  • Risk and risk management
  • Shareholdings of major shareholders
  • RPTs
  • Corporate governance and Corporate Social Responsibility (CSR) statements
• Information is available through company websites and the Department of Business Development (DBD).
• Thai Financial Reporting Standards (TFRS) are converging with International Financial Reporting Standards (IFRS).

Board Practices and Company Oversight

• Most boards have non-executive directors, with at least one-third being independent.
• Boards typically have separate chairs and CEOs.
• Directors are legally bound by duties of loyalty and care.
• Audit committees are common, and many have nomination and remuneration committees.
• Whistleblower protection is in place.
• However, board independence and CEO selection remain problematic, as controlling shareholders often influence board selection and CEO appointments.

Key Obstacles

• Some regulations and guidelines are outdated.
• There is confusion and overlap between the SEA and Public Limited Companies Act (PLCA).
• Market participants may not fully understand governance requirements.
• The SEC and BoT are not fully independent from the government and Ministry of Finance (MoF).
• SOEs still face governance challenges, including large numbers of civil servants on their boards.
• Minority shareholders, especially foreign ones, have limited influence and often do not receive full information on control structures.
• Auditors may provide non-audit services and lack independent oversight.
• Indirect ownership and control through custodians or shareholder agreements are not always disclosed, despite SEC requirements.

Capital Markets Overview

• Thailand's real GDP grew at an average of 4% between 2000 and 2007, but slowed during the 2008 crisis.
• By 2012, the economy had recovered, growing at 4.7% and expected to grow at 5.0% in 2013.
• Stock Exchange of Thailand (SET) listed 558 companies in 2012, including 539 listed companies.
• The SET index rebounded significantly, closing at 1391.93 points in 2012.
• Stock market turnover is high, at 104.8% of GDP, surpassing many other East Asian countries and the OECD median.
• Top 10 traded companies account for 38% of total value traded, which is relatively low compared to other economies.

Ownership Structure

• Free float is 48%, indicating less concentrated ownership than many other emerging markets.
• Controlling shareholders are common, often owning less than 50% of shares.
• Family groups remain a key ownership type.
• SOEs own 58 companies, with majority stakes in five listed companies and minority stakes in 12 others.
• SOEs control about 30% of banking assets and dominate sectors like energy, transportation, and water.
• Foreign ownership is limited, but Non-Voting Depository Receipts (NVDRs) allow foreign investment in certain companies.

Recommendations

1. Improve SOE governance by benchmarking against OECD standards.
2. Enhance independence of the SEC and BoT from the government.
3. Update and clarify SET and SEC guidelines to reduce confusion.
4. Strengthen shareholder rights, especially for foreign shareholders.
5. Finalize convergence to IFRS and improve beneficial ownership disclosure.
6. Strengthen auditor independence and the effectiveness of market intermediaries.
7. Increase board independence by promoting independent chairs and improving oversight of management.

Conclusion

Thailand has made significant strides in corporate governance since the 1997 crisis and the 2005 report. The framework is relatively comprehensive and well-complied with in many areas. However, challenges remain in terms of board independence, shareholder rights, regulatory clarity, and transparency in ownership. Continued reform and international alignment are necessary to sustain investor confidence and support long-term economic development.