Good corporate governance
1. Policy on Corporate Governance
The board of directors should provide a report of company’s Corporate Governance Policy which contains Principles of Corporate Governance such as:
The board should disclose that policy in the annual report for acknowledgement of shareholders and every groups of stakeholders. The board of directors should explain in the annual report about its policy on corporate governance, how the company applies the recommended principles, along with a summary of situations and the reasons for not being able to apply them at the moment (if any).
- Rights and Equitable Treatment Shareholders and Various groups of Shareholders
- The Board : Structure, Roles, Duties, Responsibilities, and Independence
- Information Disclosure and Transparency
- Controlling System and Risk Management
- Business Ethics
The board should disclose that policy in the annual report for acknowledgement of shareholders and every groups of stakeholders. The board of directors should explain in the annual report about its policy on corporate governance, how the company applies the recommended principles, along with a summary of situations and the reasons for not being able to apply them at the moment (if any).
2. Shareholders : Rights and Equitable Treatment
The board of directors should facilitate shareholders’ meetings in such a way that they encourage equal treatments for all shareholders. There should not be any difficult procedures, excessive expenses, or denial that would lessen the access to studying company information, as well as well as attending shareholders’ meetings.
3. Various groups of Stakeholders
There are many groups of stakeholders within the system of corporate governance. Principal groups of stakeholders include customers, the management and employees, suppliers, shareholders of investors, external auditors, the state, and the communities in which the company’s activities are located.
Other stakeholders include trade unions, competitors, and creditors, etc. Each has objectives and expectations different from the company.
The board of directors should perceive about stakeholders’ legally rights (stakeholders include employees, suppliers, communities, rivals, and creditors, etc.) and ensure that those rights are protected and treated with care. The board should support cooperation between the company and the various groups of stakeholders in order to secure the business wealth and stability.
Other stakeholders include trade unions, competitors, and creditors, etc. Each has objectives and expectations different from the company.
The board of directors should perceive about stakeholders’ legally rights (stakeholders include employees, suppliers, communities, rivals, and creditors, etc.) and ensure that those rights are protected and treated with care. The board should support cooperation between the company and the various groups of stakeholders in order to secure the business wealth and stability.
4. Shareholders’ Meetings
Chairman of the meeting should allocate appropriate time and encourage equal opportunities for shareholders to express their opinions and raise any question the meeting, according to the agenda and the issues presented to the meetings,
Every director, particularly chairpersons of the committees should attend the shareholders’ meeting to respond to questions.
Every director, particularly chairpersons of the committees should attend the shareholders’ meeting to respond to questions.
5. Leadership and Vision
At the pinnacle of a company, the board of directors should possess leadership, vision, and decision-making independence for the best interests of the company and the shareholders at large.
Both the board and the management are accountable to the shareholders; hence there should be a system in which roles and responsibilities are clearly separated between the board and the management, as well as between the board and the shareholders.
Both the board and the management are accountable to the shareholders; hence there should be a system in which roles and responsibilities are clearly separated between the board and the management, as well as between the board and the shareholders.
6. Conflict of interests
The board, the management, and shareholders should consider to remove the issues of conflict of interest carefully, honestly, reasonably, and independently on a virtuous ground for the best interests of the company.
7. Business Ethics
The board of directors should provide code of ethics or statement of business conduct for all directors and employees to ensure that they are aware of, understands, and would keep monitoring the code of conduct as expected by the company and its shareholders.
8. Balance of Power for Non Executive Directors
It is the duty of the board, with approval from the shareholders’ meeting. To determine the number of director, and further define the proportion of executive directors and independent non-executive directors. However, it is proposed that one-third of the total directors on the board should be independent, with three as the minimum. The qualifications of independent directors should be held to the same standard as the qualifications for membership of the audit committee in accordance with Notification of the Stock Exchange of Thailand.
In addition to the provision that the board of directors should comprise one-third members being independent directors, in case where a company has significant shareholders with dominating power, there should be a certain number of directors representing a fair proportion of each group’s investment.
In addition to the provision that the board of directors should comprise one-third members being independent directors, in case where a company has significant shareholders with dominating power, there should be a certain number of directors representing a fair proportion of each group’s investment.
9. Aggregation or Segregation of Positions
The board and shareholders should be entitled to freedom of choice, with regard to the most appropriate way the company would go about the matter. They may combine the titles of chairman of the board and president into on position, or keep them as two separate positions. In the latter case, an independent director is eligible to be appointed chairman of the board.
Whichever way they choose, there should be a clear separation of power and authorities so that no one would be granted unlimited power.
Whichever way they choose, there should be a clear separation of power and authorities so that no one would be granted unlimited power.
10. Remuneration for Directors and the Management
- Scale and components of remuneration for directors should be appealing enough to attract and retain quality directors whom the board needs, but avoid excessive pays.
Remuneration for non-executive directors should be comparable to the general practice in the industry, with regard to work experience and commitment, as well as the benefits each director brings. Directors who are assigned with extra work (being members of committee, for example) should be paid appropriately more.
Executive directors should receive the remuneration that is linked to the performances of the company and that of each director’s - Remuneration for the CEO and top executives should be determined in accordance with the principles and policy set by the board, within the framework approved by the shareholders’ meeting. The board should review a committee’s recommendation (if any) and make the final decision.
For the best interests of the company, the remuneration in salary, bonus, and long-term incentives should correspond to the performances of the company, as well as that of each executive’s - Setting remuneration is a matter that directly involves the directors. It therefore needs to be carried out with transparency and obtains an approval from the shareholders.
Directors should not be involved in the decision-making concerning their own remuneration. - The board of directors should disclose in the annual report its remuneration policy and the amounts set for directors and top executives in accordance with Securities and Exchange Commission’s rule.
11. Board of Directors’ Meetings
Board of directors’ meetings should be regularly scheduled in advance. At the meetings, chairman of the board should promote prudent consideration and allocate appropriate time for the management to present adequate issues and enough for the directors to broadly discuss important matters with care.
It is a duty of directors to attend every board meeting, except with reasonable excuses. The board of directors should disclose the total attendance of each director in the annual report.
It is a duty of directors to attend every board meeting, except with reasonable excuses. The board of directors should disclose the total attendance of each director in the annual report.
12. Committees
The board should provide for committees, especially for audit committee and remuneration committee, to help the board in studying various issues in details and screen workload according to certain situations. It should be clearly provided in the policy and framework regarding qualities of members in the committees, their job responsibilities, conduct of meeting, and reporting to the board.
All or most members of the committees should be non-executive directors, while chairmen of the committees should be independent non executive directors.
All or most members of the committees should be non-executive directors, while chairmen of the committees should be independent non executive directors.
13. Controlling System and Internal Audit
The board of directors should provide, maintain, and review a controlling system in which financial , operations, and compliance controls are incorporated. The system should also comprise risk management and pay a great deal of attention to all the early warning signs and extraordinary items.
The board should commence internal audit activities by setting up a separate unit within the company to handle them.
The board should commence internal audit activities by setting up a separate unit within the company to handle them.
14. Directors’ Reporting
The board should provide a report indicating its responsibilities to prepare financial statements, and be exhibited alongside the auditor’s report in the company’s annual report. The board of directors’ report should cover important topics of Code of Best Practice for Directors of Listed Companies as prescribed by the Stock Exchange of Thailand.
15. Relations with Investors.
The board of directors should ensure that the company disclosed important information correctly. Timely and transparently. The Board should provide an Investor Relations Unit to represent the company in communication with institutional and individual investors, stock analysts in general and state agencies concerned. The board should provide for adequate resources to help develop knowledge and ability of company personnel in their communication and resenting information.