Maull A recent revision in the scorecard puts greater emphasis on board diversity, which includes disclosing a detailed diversity policy, and having female directors on board. Cb updates governance code after arrest of former head. Another topic that engendered much discussion on Tuesday was diversity in Singapore companies and boards. Going back toit assesses the CG of the largest publicly listed companies in six participating Asean nations. To achieve this target, we need to double scoercard number of female directors we have. On the edge of a new Cold War.
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Corporate governance refers to the system of governance which controls and directs corporations, and monitors their actions and policies. The Scorecard judges five key principles of corporate governance in each nation: Rights of shareholders 10 percent ; Role of stakeholders 10 percent ; Equitable treatment of shareholders 15 percent ; Disclosure and transparency 25 percent ; and Responsibilities of the board 40 percent The percentages indicate the allocated weight of each principle in determining the Scorecard of each country.
The complete report can be found here. Indonesia Average corporate governance score: The report found that a majority of PLCs in Indonesia still do not practice corporate governance at an international standard. Many of the corporate governance practices included in the Scorecard are voluntary practices, but the report details that Indonesian PLCs often only implement the mandatory practices, or the bare minimum necessary.
Therefore, they are potentially unaware of the other corporate governance practices that can be voluntarily implemented. Malaysia Average corporate governance score: Notably, of the top 20 companies, six of them are government-linked companies similar to how government-linked companies in Indonesia performed at a higher standard.
In the Securities Commission of Malaysia launched the Corporate Governance Blueprint with a five-year action plan to improve corporate governance. This has already resulted in the release of the new Malaysian Code on Corporate Governance in , which identified broad principles and specific recommendations on both structures and processes to improve corporate governance.
Overall, however, companies in Malaysia frequently adhered only to the minimal requirements of the corporate governance laws, rules and regulations. Philippines Average corporate governance score: This is also why there are no maximum and minimum scores present.
The following graph outlines the scores listed by category. Singapore Average corporate governance score: Only six companies received a score of more than 75 percent, while 31 received a score of less than 50 percent. The average score for the 50 highest-ranked PLCs amounted to The regulatory framework of corporate governance for PLCs in Singapore is comprised of the following corporate governance rules, principles and recommended practices that are administered by the relevant regulatory bodies: Companies Act of and subsequent amendments ; Securities and Futures Act of and subsequent amendments ; Listing Requirements Rulebook ; and Singapore Code of Corporate Governance of and subsequent revisions.
Thailand Average corporate governance score: These principles have since been further revised, and will take effect in January It was revised in July to include a main focus on board responsibilities and disclosure and transparency requirements. The graph below illustrates the average performance of Vietnamese PLCs in each category as well as the highest and lowest scores in the country. However, conversely, a company in Vietnam may actually practice good corporate governance but may fail to report its practices through public information channels such as annual reports, websites and regulatory filings.
In addition, the poor scores are attributed to minimal investor communications in English as most Vietnamese PLC investor communications are held solely in the Vietnamese language.
Conclusion The corporate governance report provides immense insight for potential foreign investors into the corporate governance of ASEAN-based companies. Strong corporate governance correlates to a positive effect on company performance due to greater transparency, increased efficiency and liability. Notably, the report lists that Thailand Well-governed firms have been noted to significantly outperform poorly governed firms by up to 15 percent a year.
Since better corporate governance is correlated with better operating performance, the constant working of ASEAN-based companies to raise their standards will provide the region better results and increase investor confidence. Share this:.
ASEAN CG Scorecard
ASEAN Corporate Governance Scorecard