Boardroom Flash Vol.7/2016 SEC Announces the Results of its Review of Audit Work
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Policy Alert
The SEC reviews and reinforces the “Operating Guidelines on allowing Minority Shareholders to propose, in advance, possible Agenda Items for consideration and names of qualified persons for consideration as possible nominees to be appointed as Board Directors Shareholders at the Shareholders Meeting.”
On July 22, 2016, the Office of the Securities Exchange Commission (SEC) issued a letter to remind and reinforce the established guidelines on allowing Minority Shareholders to propose, in advance, possible Agenda Items for consideration and names of qualified persons for consideration as possible nominees to be appointed as Board Directors Shareholders at the Shareholders Meeting”. The key points of this announcement states that the SEC has reviewed the established internal regulations of listed companies relating to Minority Shareholders being able to submit, in advance, proposed Agenda Items for consideration and names of persons to be considered for possible consideration as nominees for being appointment as Board Directors; whereby such, it was found that actual practices still do not completely correspond to the legal stipulations and regulatory requirements as specified in Article 89/28 of the Royal Act on Securities and Exchanges, BE 2535(Royal Act).
Therefore, the SEC wishes to remind listed companies, so that they will be fully aware of the established operating guidelines relating to Shareholders’ rights in being able to propose possible Agenda Items for consideration at the Shareholders Meeting’, and that such practices will fully correspond to the established legal stipulations and regulatory requirements as specified in the Royal Act.
CG News Update
Preparations are underway to further develop the criteria used in evaluating companies with regards to the ASEAN CG Scorecard Project for 2016
The IOD has undertaken the evaluation of listed Thai companies in connection with the ASEAN CG Scorecard since 2012, which has taken place every year since then. However, at the end of 2015, the OECD has revised and updated the applicable Principles of Corporate Governance (CG), details of which were announced and informed through its revised publication “G20/OECD Principles of Corporate Governance” upon which the various criteria used in the ASEAN CG Scorecard evaluation exercise are mainly based.
SEC Announces the Results of its Review of Audit Work
The Office of the Securities & Exchange Commission (SEC) announced the summary results of its second round of reviews of the quality of audit work. It was found that, in this second round of reviews for audit work undertaken (in 2013 - 2015) by all the 25 audit firms and their auditors, who are approved to undertake audit work within the Thai capital markets, their overall quality of audit work has clearly improved compared to the first round of reviews of audit work (performed in 2010 - 2012). As such, in this second round of reviews the average score of all the achieved scores for work undertaken within the capital markets was 1.64 compared to 1.79 for the first round. (The average score of 1 = very good passing grade, while the average score of 5 = failed to pass.).
Turning ‘Commonsense’ Governance into Common Practice
The most powerful names in U.S. business have published guidance on Commonsense Principles of Corporate Governance (Commonsense Principles) to provide a framework to improve corporate governance and make it more long-term–oriented. Warren Buffett of Berkshire Hathaway, Laurence D. Fink of BlackRock, Jamie Dimon of JPMorgan Chase & Co., and others have outlined principles covering nine broad categories of governance issues that, while nonbinding, will likely spark an important dialogue in boardrooms.
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