Thailand: building the foundations of the profession
CSj interviews Pensri Suteerasarn, President of the Thai Listed Companies Association, on the latest initiatives in Thailand to strengthen the local corporate secretarial profession.
Thanks for giving us this interview, can we start with some background about yourself?
‘I am working for the Thai Listed Companies Association. The Association’s members are companies listed on the Stock Exchange of Thailand and we currently have about 500 members. My background is as an investment banker. Under the Association we have the Thai Corporate Secretaries Club (TCSC) whose members are all corporate secretaries for listed companies. We are working with our friends in Hong Kong, Singapore and Malaysia to set up an institute for corporate secretaries, similar to the one in Hong Kong. That is part of our five-year plan.’
Would the institute be part of, or independent from, the global ICSA Chartered Secretarial body?
‘We have not decided yet. We are a member of the Corporate Secretaries International Association (CSIA) and the most recent CSIA council meeting was held in Thailand. Hong Kong has a similar legislative framework to the UK, but Thailand is different. When Thailand updated its Securities Exchange Act eight years ago it brought in a requirement for listed companies to appoint a corporate secretary, but there is still no requirement regarding the qualifications of these corporate secretaries. The securities law only requires companies to submit the name of their appointed corporate secretary to the Securities Exchange Commission (SEC).’
Is the TCSC acting as the de facto professional body for corporate secretaries in Thailand?
‘Yes. For example, we are offering a training course for corporate secretaries in Thailand.’
Is the role of corporate secretary relatively new in Thailand?
‘It has been established for some time. The large corporates in particular had qualified corporate secretaries long before the revision to the Securities Exchange Act requiring the appointment of a corporate secretary and we at the Thai Listed Companies Association have been offering training for corporate secretaries for more than 10 years.’
Are the core duties of corporate secretaries in Thailand similar to those in other jurisdictions?
‘Yes, I think the role is similar. Our new corporate governance guidelines are quite advanced and compatible with other capital markets in the world. The corporate secretary is the ‘gatekeeper’ for corporate governance and other issues such as information disclosure. So this is very similar to other countries in the region. The main difference is the absence of a qualification requirement. In Hong Kong you have to have the Chartered Secretarial qualification, or you have to be a lawyer or accountant, but here in Thailand anyone can be a corporate secretary.’
Do you think there is a need to have a mandatory qualification requirement?
‘We believe so.’
Are there moves to bring that in?
‘We are talking to the SEC and the CSIA meeting here in Thailand in 2016 was a good way to learn from the experiences of other countries. We are working to promote a better understanding, particularly among the medium-sized and small companies, of the important role performed by the corporate secretary in terms of improving the governance of the board and the company.’
Do you think the proposed corporate governance code in Thailand will help promote better awareness of the role of the corporate secretary?
‘Yes. Over the last two years, the SEC has been studying the corporate governance codes of other countries and it has seen an increasing emphasis on the role of the board of directors, working closely with management, to form the strategy of the company and to monitor the implementation of that strategy. We have also learned from peers in other countries the importance of the board accessing the information needed to make good and timely decisions. That’s very important. Directors need to know what’s going on in the company down to the operations level. The recent scandal at Volkswagen shows that directors should not be waiting for management to inform them about what is going on. They have to make sure that they stay informed.’
Do you think the corporate secretary can play a role in ensuring directors have the information they need?
‘I think so. The company secretary is, as you know, the connection between the board and management, and also between the internal management teams. But there should also be a code of conduct which makes it clear that directors have a responsibility to look at the sustainability of operations. They should not only be concerned with the short-term performance of the company.’
Do you think there has been a convergence towards global standards of corporate governance?
‘Yes. Investors are investing globally and when they are talking to Thai listed companies and they see practices that differ from their expectations they often make recommendations. Big institutional investors in the capital markets of Asia want to see the same performance levels in terms of corporate governance across the different markets. And of course we also have Thai companies that invest in the region and globally. The large corporates with subsidiaries and affiliates overseas want to see the same governance standards applied throughout their portfolio.
Thailand ranked fifth in the region in the CG Watch 2016 [see end note for more on this publication]. The key area where we need to make an improvement is enforcement. Our laws are good and up to date, but ensuring that people comply with them is the real issue.’
What’s your view of the increased level of cooperation between Asian jurisdictions to promote the corporate secretarial profession – in particular the creation of the ASEAN Corporate Secretaries Associations (CSA) Network?
‘I very much support this. It is good for us to be part of the ASEAN CSA Network because it is a very good learning platform for us. The Network meeting and the Professional Exchange Programme that we recently attended in Hong Kong helped us to learn a lot about corporate governance, the role of the corporate secretary and the role of the anti-corruption agency in Hong Kong.’
Where would you like these trends to go over the next 10 years?
‘Our main focus is setting up the institute of corporate secretaries in Thailand which I mentioned. We are hoping to run it as a certification programme, so becoming a member of the institute will mean that you can take up a corporate secretarial role. But we have some way to go to catch up with jurisdictions with established professional bodies. Of the five members of the ASEAN CSA Network, three – Hong Kong, Singapore and Malaysia – are part of the global Chartered Secretarial body. The other two members – Indonesia and Thailand – are outside that grouping. Indonesia has already set up an association for corporate secretaries and we hope to have ours up and running as soon as possible.
The traditions and history are different in different jurisdictions in the region. In Malaysia, all companies have to appoint a company secretary, in Thailand this requirement only applies to listed companies. Moreover, corporate service providers are a major employer of corporate secretaries in Malaysia, Singapore and Hong Kong but not in Thailand. Where companies appoint outsiders to perform the role of the corporate secretary, it is mostly lawyers who take up the role because we don’t have the corporate services firms.’
Pensri Suteerasarn, President of the Thai Listed Companies Association, was interviewed by Kieran Colvert, Editor, CSj.
The ASEAN Corporate Secretaries Associations Network comprises: The Chartered Secretaries Institute of Singapore; The Hong Kong Institute of Chartered Secretaries; The Indonesian Corporate Secretary Association; The Malaysian Institute of Chartered Secretaries and Administrators; and The Thai Listed Companies Association.
‘CG Watch 2016’ is available on the websites of CLSA Ltd (www.clsa.com) and the Asian Corporate Governance Association (www.acga-asia.org).
SIDEBAR – Thailand: governance profile
Legal system: common law.
Economic system: market economy.
Key regulation: The Securities and Exchange Act includes a requirement for listed companies to appoint a corporate secretary, but there is still no requirement regarding the qualifications of these corporate secretaries.
Financial reporting standards: International Financial Reporting Standards.
Key statutory/regulatory bodies: The Securities and Exchange Commission, The Stock Exchange of Thailand and the Ministry of Commerce (MoC) – listed companies file the minutes of shareholders’ meeting and financial reports with the MoC.
Predominant ownership structure: the majority of Thai listed companies have a controlling shareholder.
Board structure: single-tier.
Corporate secretary job title: companies use both ‘company secretary’ and ‘corporate secretary’ in translation, but in Thai this is one term.
Corporate secretary duties: these are very similar to the typical job description of the corporate secretary worldwide – focusing on board support, regulatory compliance and information disclosure.
Professional body: The Thai Corporate Secretaries Club (TCSC) under The Thai Listed Companies Association is currently acting as the de facto professional body. The TCSC provides training to corporate secretaries, but there are plans to establish an official professional body for corporate secretaries within five years.