The term “Innovation” has been widely used in all sectors, especially amid rapid changes at present.  In terms of business and impacts from COVID-19 pandemic, “innovation” is one key strategies to “tackle crisis” along with the organization’s enhancement of potential, efficiency, effectiveness, and sustainability.

Many organizations have continuously emphasized and allocated resources on research and development of innovations in various fronts. They either established Innovation Committees or hired experts to take care of this particular tasks.  However, it requires knowledge, understanding, and motivation from the Board to successfully drive corporate “innovation”. 

In December 2021, the Institute of Corporate Directors Malaysia (ICDM) held Virtual Talk on “2022 ASEAN Board Trends: What Keeps You Awake at Night?”. It presented “2022 ASEAN Board Trend Report: Driving Innovation for Sustainability” from a survey of 250 directors at public companies in the ASEAN IOD Network (Thai IOD included).  The survey result identified five trends (ranked by priorities) that the Board should pay attention to:

1.     Innovation & transformation a top boardroom priority

2.     Internalization of ESG principles in the company

3.     Strengthen oversight capabilities in risk and sustainability

4.     Board refreshment is imperative

5.     Directors all in for expanded responsibilities

Clearly, “Innovation” is among key priorities that the Board need to focus on this year. It is as crucial as business model agility, diversification, and transformation. 

The ICDM report listed strategic priorities to drive corporate success over the next 2-3 years (Figure 1), challenges concerning application of such strategies (Figure 2), and aspects of Board improvement to steer the organization toward success (Figure 3).

The IOD also would like to mention an interesting finding on “Global Innovation Index 2021” under COVID-19 backdrop by the World Intellectual Property Organization (WIPO). Out of 132 surveyed countries worldwide, four countries in ASEAN made the Top 50 list including Singapore (8), Malaysia (36), Thailand (43), and Vietnam (44).  Another ASEAN member worth monitoring is the Philippines, which made significant progress in terms of “innovation” over the past 6-7 years by leaping from the 100^th ranking in 2014 to the 51^th in 2021.


Thailand is outstanding for alertness of its markets and businesses as well as relatively high investment budget set for “innovation” research and development. However, there still are restrictions concerning rules and regulations in ICT services import-export, staff training, and high research and development cost abroad.  Therefore, the National Innovation Agency (Public Organization) aims to collaborate with related agencies to drive Thailand toward innovation leading nations and make the Top 30 list of the Global Innovation Index by 2030.

As regulator and supporter, the Securities and Exchange Commission (SEC) has included “innovation” promotion in the CG Code since 2017 as follows: 

·       (Principle 2.2) The board should ensure that the company’s annual and medium-term objectives, goals, strategies, and plans are consistent with the long-term objectives, while utilizing innovation and technology effectively.

·       (Principle 5.1) The board should prioritize and promote innovation that creates value for the company and its shareholders together with benefits for its customers, other stakeholders, society, and the environment, in support of sustainable growth of the company.

To support and emphasize the significance of “innovation”, the IOD has discussed with relevant regulators to modify survey criteria for “the Corporate Governance Report of Thai listed companies 2023 (CGR)” and added an evaluation criteria to promote innovation under “Role of Stakeholders and Business Sustainability” category.

·        (No. 41) The company discloses its policy and practices to foster innovations related to the technological
development, work processes, products and services, or business models.

·        (No. 42) The company discloses its plans and operational results on innovation management related to
the technology, work processes, products and services, or business models.

Besides standardizing criteria, the IOD also educated listed companies about innovation through workshop, issuance of Guideline on Board’s Role in Innovation Governance, training and seminar on issues relevant to Innovation Governance.   

From all mentioned above, it is crystal clear that innovation and transformation are inevitable. The Board must emphasize the significance as well as build awareness among management and staffs to embed corporate culture in continuous learning, developing, and improving. Some units may view “innovation” as wasteful but using “innovation” at the right place at the right time has proven to be effective tools for businesses of all sizes and types, particularly startup SMEs.  Inclusion of “innovation” into corporate culture will not only drive innovation development in the national level but also gear toward regional development, as a whole.

Aurakarn Jungthirapanich
Senior CG Analyst – Research and Development
Thai Institute of Directors