ASEAN Corporate Governance Scorecard Country Reports and Assessments 2015

Joint Initiative of the ASEAN Capital Markets Forum and the Asian Development Bank

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• Publisher: Asian Development Bank
• Year: 2017
• Print ISBN:
  9789292579296
• eBook ISBN:
  9789292579302
• Topic: Business
• Subtopic: Corporate Governance
• Index: Business

Good corporate governance practices reduce vulnerability to financial crises, reinforce property rights, reduce the cost of capital, and lead to greater capital market development. In this fourth edition of the Association of Southeast Asian Nations (ASEAN) Corporate Governance initiative of the Asian Development Bank and the ASEAN Capital Markets Forum, over 500 top publicly listed companies from six ASEAN countries were assessed. In depth analysis of each country including rights of shareholders, equitable treatment of shareholders, role of stakeholders, disclosure and transparency, and responsibilities of the board are discussed.

1 Executive Summary

Background

The Association of Southeast Asian Nations (ASEAN) Corporate Governance initiative composed of the ASEAN Corporate Governance Scorecard (ACGS)and assessment and ranking of ASEAN publicly listed companies (PLCs), is among several regional initiatives of the ASEAN Capital Markets Forum (ACMF). This initiative has been a collaborative effort of ACMF and the Asian Development Bank since 2011.

ACMF Working Group D, the body responsible for this initiative, is now led by the Philippines Securities and Exchange Commission after the handover from Securities Commission Malaysia in November 2015. Its members include capital market regulators and corporate governance proponents from the region. The ASEAN scorecard was developed based on international benchmarks such as the Organisation for Economic Co-operation and Development (OECD) Principles of Corporate Governance (2004) and the International Corporate Governance Network Corporate Governance Principles, as well as industry-leading practices from ASEAN and the world.

The first, second, and third editions of the annual ASEAN Corporate Governance Scorecard: Country Reports and Assessments¹ provided the impetus for raising the public’s awareness on this initiative and in profiling the top domestic PLCs from each participating country. This 2015 report, which is the fifth round of assessment, continues the momentum toward elevating the visibility of ASEAN PLCs among investors. For this round, ASEAN corporate governance experts consisting of domestic ranking bodies (DRBs) from Indonesia, Malaysia, the Philippines, Singapore, and Thailand, including a corporate governance expert from Viet Nam, undertook the corporate governance assessment of ASEAN PLCs, which was concluded in October 2015. The DRBs were the Indonesian Institute for Corporate Directorship; the Minority Shareholder Watchdog Group, Malaysia; the Institute of Corporate Directors, Philippines; the Singapore Institute of Directors and the Centre for Governance, Institutions and Organisations of the National University of Singapore Business School; and the Thai Institute of Directors.

Assessment Methodology

The OECD Principles of Corporate Governance were used as the main benchmark for the ASEAN scorecard. Many of the items in the scorecard are international and regional best practices that may go beyond the requirements of national legislation.

The ASEAN corporate governance experts also drew from the existing body of work and ranking initiatives in the region, including those of institutes of directors, shareholder associations, and universities, to guide the initial inclusion of items in the ASEAN scorecard.

The scorecard covers the following five areas of the OECD principles:

(i)	Part A: Rights of Shareholders,
(ii)	Part B: Equitable Treatment of Shareholders,
(iii)	Part C: Role of Stakeholders,
(iv)	Part D: Disclosure and Transparency, and
(v)	Part E: Responsibilities of the Board.

The use of two levels of scoring is designed to better capture the actual implementation of the substance of good corporate governance. Level 1 comprises descriptors or items that are, in essence, indicative of the laws, rules, regulations, and requirements of each ASEAN member state and the basic expectations of the OECD principles. Level 2 consists of bonus items reflecting other emerging good practices and penalty items reflecting actions and events that are indicative of poor governance.

The assessments of corporate governance practices of PLCs were primarily based on publicly available and easily accessible information contained in annual reports and on company, state securities commission, and stock exchange websites. Other sources of information considered are company announcements, notices, circulars, articles of association, minutes of shareholders’ meetings, corporate governance policies, codes of conduct, and sustainability reports. As the assessments are based primarily on disclosures, these may not necessarily reflect the full extent of a participating country’s actual corporate governance ecosystem.

For a company to be assessed and ranked, most of the available documents must be in English. Further, to be given points on the scorecard, all disclosures must be unambiguous and sufficiently complete. Considering the same, the sample of PLCs in each jurisdiction may not necessarily represent the whole country’s level of corporate governance developments, transparency, and disclosures.

Prior to the commencement of assessment, the ASEAN corporate governance experts held comprehensive discussions, reviewing ...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Tables and Figures
• Abbreviations
• Foreword
• 1. Executive Summary
• 2. Reports and Assessments
• Back Cover