June 8, 2012

The Corporate Governance Review – Thailand Chapter

Law Business Research

The Corporate Governance Review has recently published its second edition covering the field of corporate governance law in 32 different jurisdictions. The Thailand chapter was written by Santhapat Periera and Charunun Sathitsuksomboon of the Tilleke & Gibbins corporate and commercial group.

As directors become increasingly concerned about how to improve their enterprise risk management, how much outside directors should know about the business, and which stakeholders can and should be involved in dialogue with boards about strategy, succession, and income, corporate governance becomes key to creating that balance. Moreover, due to the failure of corporate governance on numerous occasions during the financial crisis, there has been an increased interest in government acts, further supervision, and new corporate governance codes for boards, shareholders, and shareholder activists.

The Thai government designated 2002 as “The Year of Good Corporate Governance” and launched a number of changes and important reforms, including the establishment of the National Corporate Governance Committee. In the same year, the Stock Exchange of Thailand implemented 15 Principles of Good Corporate Governance for Listed Companies. These milestones have been important in Thailand’s corporate governance landscape, and continue to alter corporate governance practices and grow to include a number of associations governing policies, measures, upgrade schemes, work with related agencies to improve operating processes (such as legal reforms and ministerial regulations), and promote the guidelines of good corporate governance and essentially raise confidence among international investors.

The following article therefore delves into greater detail about the role that legislation in Thailand plays and its impact on corporate governance in Thailand, the board structure and general practices adopted in Thailand, the duties, responsibilities, and conditions places on directors of a listed company, the rights and powers of shareholders, and the principles of disclosure as stipulated by the Principles of Good Corporate Governance. The chapter also provides a brief introduction to corporate responsibility, and gives some insight into the future of corporate governance in Thailand, and the necessities to cope with global economic trends and expand authority of directors’ and executives’ liabilities. 

The Corporate Governance Review is published by Law Business Research, and will feature at the 11th Annual IBA M&A Conference in New York on June 13/14.

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