ASEAN KEY DESTINATIONS
Asean corporate governance launches in 2012
A region-wide corporate governance ranking initiative will be launched next year as part of a broader plan aimed at developing the Asean capital market.
The initiative will be led by the national institutes of directors in the participating Asean economies and assisted by the Asian Development Bank and the Organisation for Economic Co-operation and Development (OECD).
Thirachai Phuvanatnaranubala, the secretary-general of the Securities and Exchange Commission, said the aim was to develop comprehensive corporate governance rankings using a single standard across the region for investors.
"This will take a more proactive approach. CG ratings now rely primarily on annual reports and feature assessments such as the role of directors and meeting procedures," he said.
"This Asean initiative will not only rely on publicly available information, but also feature direct company visits as part of the ratings process."
Harmonisation of standards is a critical element of plans to integrate the region's capital markets under the Asean Economic Community initiative, which aims to liberalise the flow of goods, services, labour, capital and investment within the region by 2015.
Mr. Thirachai, who also currently chairs the Asean Capital Markets Forum (ACMF), said integration of the capital markets would be key in supporting "cross-border connectivity".
But the devil is in the details. Integration involves harmonising accounting standards, disclosure rules and market regulations to help reassure investors that a public offering or financial report in, say, Singapore or Thailand carries the same weight as that in Cambodia or Vietnam.
The three most advanced capital markets, Thailand, Singapore and Malaysia, have already moved to reconcile disclosure and securities distribution rules under the "Asean and Plus Standards" programme.
Essentially, members commit to adhering to Asean standards that are based on international regulations set under the International Organisation of Securities Commissions (IOSCO),
International Financial Reporting Standards (IFRS) or International Standards on Auditing (ISA). The "Plus Standards" refer to additional requirements set by individual countries to suit national market practices or laws.
"Actually, if we look across the region, it turns out that nearly every country has set standards beyond that of international best practices," Mr. Thirachai said.
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