2020 CGR Score Heads Further North As Thai Listed Firms Gear toward Sustainability

On November 19, 2020, Thai Institute of Directors Association (IOD), in collaboration with the Stock Exchange of Thailand, announced the findings of Corporate Governance Report of Thai Listed Companies 2020.  According to a survey of 692 listed companies, Ms. Sirinun Kittiwaytang, Executive Vice President at IOD, said overall average score was considered very good at 83 percent, the record high level since CGR initiation in 2001.

The findings showed that Thai listed companies recognized the significance of corporate governance development to ensure business sustainability.  Thai companies took into account all stakeholders and Board leadership in governing environment and human resources in alignment with the CG Code and expectation of both domestic and global investors. 

Considering the average scores by category, those passing the 80 percent threshold were Rights of Shareholders (94 percent), Equitable Treatment of Shareholders (94 percent), Disclosure and Transparency (87 percent), and Role of Stakeholders (83 percent). The average score in the Board Responsibilities category was at 76 percent, better than the previous year and showing an encouraging positive trend.

Based on level of CG recognition, sorted by number of National CG Committee’s symbols, 616 companies, or 89% of participated companies, achieved the overall scores of 70 percent or higher. There were 130 companies (18%) with scores in the range of 70-79 percent (3 stars), 246 companies (36%) with scores in the range of 80-89 percent (4 stars) and 240 companies (35%) with scores at 90 percent or above (5 stars). In 2020, the number of companies with 5-star recognition rose 47, or 25%, to 240 from 193 companies in 2019.  They consisted of 102 companies with market capitalization over Bt10 billion, 57 companies with market capitalization between Bt3,000 million- Bt9,999 million, 52 companies with market capitalization between 1,000 million -2,999 million, and 29 companies with market capitalization under Bt1 billion. 

Ms. Sirinun also mentioned the IOD’s plan to improve CGR criteria, both in terms of evaluation and scoring, to ensure that each category fits with the current context, has adequate clarity to comply, and upgrade compliance standard of Thai listed companies toward ESG and compatible with international standards.  It will also respond to changes and growing expectations to prepare Thai companies for new opportunities and enhance their competitiveness.  Through CGR improvement, Thai companies will be recognized for corporate governance aspect in the global economic community while the quality of Thai capital market will also improve in the eyes of domestic and international investors over the long run.

“Corporate governance is presently facing challenges from changing business context, with greater emphasis on sustainability. CGR criteria have a vital role in guiding Thai listed companies to comply with corporate governance principles and attain sustainable development.  The IOD also emphasizes on the preparation of listed companies to understand the revision of CGR criteria, which will be more up to date and cover ESG agenda to reflect the sustainability aspect of corporate governance.  This is one of the IOD’s roles in supporting corporate sustainability,” said Mr. Kulvech Janvatanavit, IOD’s Chief Executive Officer.

Manee Maneesaeng
Research Specialist
Thai Institute of Directors Association (IOD)