Global Corporate Governance Conference

Transcription

1 Global Corporate Governance Conference Moderator A/Prof Mak Yuen Teen Former Founding Director of the Corporate Governance and Financial Reporting Centre and Associate Professor of Accounting NUS Business School, Singapore ASEAN and Governance Panelists Ms. Justina F. Callangan SEC Director of Investor Protection and Governance Securities and Exchange Commission Republic of Philippines, Manila, Philippines Dr. Nguyen Hien Thu Director Maastricht MBA Program in Vietnam, Vietnam National University - Ho Chi Minh (VNU-HCM), University of Technology, School of Industrial Management. Ms. Selvarany Rasiah Chief Regulatory Officer Bursa Malaysia Berhad, Malaysia Mr. Tato Miraza CEO PT Antam, Jakarta, Indonesia

2 Development of an Integrated Capital Market In 2009, the ASEAN Finance Ministers endorsed the the ASEAN Capital Markets Forum (ACMF) Implementation Plan to promote the development of an integrated capital market. This initiative is undertaken in parallel with the efforts to achieve convergence in ASEAN countries by 2015 as an economic community. The ASEAN Capital Markets Forum (ACMF) is a forum which comprises capital market regulators from 10 ASEAN jurisdictions, namely Brunei Darussalam, Cambodia, Indonesia, Laos PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. Established in 2004 under the auspices of the ASEAN Finance Ministers, the ACMF works on harmonising rules and regulations to integrate the region's capital markets more closely.

3 Development of an Integrated Capital Market Indonesia has cast doubt on the viability of an integrated capital market among ASEAN member states by 2015, citing regulatory differences. Lack of a common regulatory framework shared between states was among the daunting factors dampening the realization of the plan, chairman of the capital market and financial institution supervisory agency (Bapepam-LK) Fuad Rahmany He also said that among the obstacles was a way to synchronize the regulations that were issued by each member country Most ASEAN member states have inherited deep-rooted legal systems from their former colonial occupiers, making it difficult to adopt a single regulation to suit all needs.the Indonesian legal system, for instance, is heavily influenced by that of the Netherlands, while the legal systems of Singapore and Malaysia are closely linked to that on the United Kingdom, and the system in the Philippines resembles that in the United States. Capital unity `will take ages' The Jakarta Post, 25 March 2009

4 Implementation Plan Endorsed by ASEAN Finance Ministers and Key Initiatives Fund raising Product distribution Investments Market access Harmonised of disclosure standards for equity and debt Expedited entry framework for secondary listings Corporate governance ranking of ASEAN PLCs Mutual recognition of funds and debt securities Cross-border provision of supporting marketing services ASEAN Exchange linkage Harmonise criteria for non-retail investors Promote cross-border investments through local intermediaries Mutual recognition for provision of products and services by intermediaries to nonretail investors Mutual recognition of prospectuses The ASEAN Corporate Governance Scorecard and the ranking of corporate governance of ASEAN publicly-listed companies (PLCs) are part of the initiative to showcase ASEAN as an asset class. It was started in early 2011 and funded by the Asian Development Bank (ADB). On 23 March 2012, the ACMF released the first version of the ASEAN Corporate Governance Scorecard.

5 Principles Underlying Development of the Scorecard The Scorecard should reflect global principles and internationally recognised good practices in corporate governance applicable to PLCs The Scorecard should not be based on the lowest-common-denominator but should aim to encourage PLCs to adopt higher standards and aspirations The Scorecard should be comprehensive in coverage, capturing the salient elements of corporate governance The Scorecard should enable gaps in corporate governance practices amongst ASEAN PLCs to be identified and draw attention to good corporate governance practices The Scorecard should be universal and capable of being applied to different markets in ASEAN The methodology should be robust to accurately assess the corporate governance of PLCs beyond minimum compliance and box-ticking There should be extensive and robust quality assurance processes to ensure independence and reliability of the assessment

6 Structure of the ASEAN CG Scorecard There are two levels to the ASEAN CG Scorecard Level 1 Has five major sections that corresponds to the OECD Principles Part A: Right of Shareholders 10% Part B: Equitable Treatment - 15% Part C: Role of Stakeholders 10% Part D: Disclosure & Transparency 25% Part E: Responsibilities of the Board 40% Level 2 Two additional Sections Bonus & Penalty Bonus items for companies that go beyond minimum standards Penalty items for companies with poor practices

7 The Challenges of a Single ASEAN CG scorecard To develop a single scorecard, global principles and internationally recognised good practices were used as benchmarks (e.g., OECD Principles, UK, Australia) a high bar was set There is no coordination in development of corporate rules and guidelines within ASEAN so considerable differences in best practices exist across ASEAN The use of global benchmarks helped overcome debates regarding which best practice prevails, but there was still a need to arrive at consensus on macro issues such as relative importance of corporate governance measures to protect different stakeholders and how to operationalise principles-based best practices in international benchmarks into specific measurable criteria, and issues such as singletier and two-tier board structures that exist within ASEAN