My name is Rongruja Saicheua but you can call me Ronnie.
I head up the new Governance Matters operation in Thailand and rather than bore you with my CV, I thought I’d tackle something I hope is far more interesting and perhaps even a little thought-provoking – corporate governance in Thailand and how it compares with Western practices.
I’d say very well, even if it is a qualified ‘very well’.
Yes, there are differences in the nature of our companies, most of which are either family owned or what we call SOEs – that’s State Owned Enterprises. But there are also a remarkable number of similarities and with Governance Matters now present in Bangkok, I’m sure these will soon become greater.
To understand our current governance scenario, you need to go back to the Asian financial crisis of 1997. With Thailand and our currency at the crisis’ epicentre, we needed to act quickly and with precision. We set about shaking up the local corporate governance landscape and emerged from one of our darkest chapters as the standout regional leader in this area.
It’s a reputation we’re honoured to hold – and determined to protect and nurture as we strive to achieve world best practice.
We appreciate we have a number of challenges in our world, none more so than the concentrated ownership and shareholding that characterises the Thai capital market. While SOEs are listed on the Thai Stock Exchange, the real owner remains the government and the Boards are invariably appointed by the responsible government ministry, sometimes from within the ministry and sometimes lacking the necessary qualifications and skills.
A similar lack of diversity in skills, qualifications, gender and the like – those things we all know are vital if a board is to really hum – besets the proliferation of major Thai companies still owned by families. There is a silver lining, though, and that’s that when families run the show and dominate the Board, they generally act in the very best interests of the company.
Thai culture is another point of difference. We’re very polite people and less likely to be critical. You see it in meetings where the Chairman or owner leads the conversation and the others in the room nod in agreement.
These challenges aside, there is widespread recognition of the enormous strides we have taken and continue to take to increase Board independence and with it, Board performance.
There’s also recognition that we play by the most demanding Organisation for Economic Co-operation and Development (OECD) rules, that we have a comprehensive corporate governance framework and that we achieve high levels of compliance in most, if not all, key areas.
So you see, when you dig a little deeper and scratch beneath the surface, you’ll find we have a fair bit in common…and it’s getting more so with each passing year.
Indeed, given the progress we’ve made and the tireless efforts we’re putting in, I’m quietly confident that the standard of corporate governance in Thailand will soon be second to none.