In 2015, the SEC said it completed a survey to obtain the opinion of directors, shareholders, and executive officers in listed companies regarding the factors that hinder the development of corporate governance. The results showed that the key obstacles are that major shareholders and boards do not see any benefits, and that companies believed resources needed to be allocated for other priorities (in the case of small and medium listed companies). The results also showed that listed companies still perceive corporate governance as a separate issue from business operations.
Therefore the financial regulator said it realised there was a need to issue a new CG Code as guidelines for a board, who is the leader accountable for corporate governance mechanisms. The SEC said the CG Code integrates ESG issues into the business process to set the company’s direction, strategy, operating process, monitoring, and reporting, providing a framework for the board to govern listed companies to operate responsibly for the environment and society and to create sustainable value.
The SEC is also asking for comments on its voluntary Investment Governance Code (“I Code”) that will apply to institutional investors who have become signatories. The I Code provides guidelines for the effective exercise of investment duties and stewardship responsibilities by institutional investors to further the best interest of clients, and operate as a market force for strengthening investment governance and promoting environmental, social, and corporate governance (ESG) of listed companies. The SEC said effective stewardship by institutional investors benefits investors, beneficiaries, investee companies and other stakeholders, and supports the sustainable growth of the Thai capital market and economy as a whole.