S and P says Thai companies still lack transparency in post-crisis era
S and P says Thai companies still lack transparency in post-crisis era
Agence France-Presse Bangkok
The majority of Thailand's bluechip corporations still lag far behind global standards of transparency, despite efforts for reform after the 1997-1998 economic crisis, Standard and Poor's said on Tuesday.
A report by the ratings agency and the National University of Singapore (NUS) identified problems including poor accountability, sub-standard disclosure to sharholders and a lack of independent board members.
"Only six percent (of bluechips) had a majority of independent directors... while many international boards are advocating more than 50 percent of independent directors," NUS associate professor Mak Yuen Teen said.
"Many companies do not evaluate the performance of the board or directors and only one in five disclosed how much directors are paid," he said at the report's launch here.
Mak said the widespread use of nominee shareholders by major investors was also a major problem at many of the kingdom's listed companies.
"It is a cause for concern if you don't know who actually controls the company," he said.
The report -- Corporate Governance Disclosures in Thailand: A Study of SET50 Companies -- revealed the top-five listed companies all rated significantly higher than the 45 other bluechips.
The top scorers were Banpu Public Co. Ltd., Electricity Generating PCL, Kasikornbank PCL, National Finance PCL, and The Siam Commercial Bank PCL, while lower scoring companies were not named.
The joint study rated levels of disclosure between four and 140, with the top five scoring between 71 to 80 points, and was based on information released in company annual reports.
The median score for all 50 companies was 35, with the lowest firm scoring in the zero to 10 bracket.
While 98 percent of companies disclosed complete lists of board members, only one third revealed which members were independent and almost half would not disclose directors' attendance at board meetings.
"These statistics clearly show that the independence of the boards of most Thai companies remains lacking, despite the global trend for more independent boards," the report said.
The report authors are currently working on a study of Malaysian bluechips due for release at the end of May.