Jongsureyapart, Chatrudee (2006) Factors that determine corporate governance in Thailand. PhD thesis, Victoria University.

Abstract

The aim in this study is to discover the nature and extent of corporate governance structures and practices in listed companies in Thailand. This includes a consideration of theoretical underpinning for amendments made to the western models of corporate governance that have been implemented by Thai listed companies, and of the effect of corporate governance principles on financial information, including financial reports, used by stakeholders in Thai listed companies. This study also involves the investigation of the variables for performance measurement related to corporate governance, and recommendation of measures for strengthening corporate governance in Thailand. A mail questionnaire survey was considered an appropriate method for this study. The sample was selected from firms listed on the Stock Exchange of Thailand that operate in the Bangkok region (453 companies). Questionnaires were mailed to the Chief Executive Officer for distribution to outside/independent directors and executive directors. 101 companies returned responses, generating a 22% response rate. Furthermore, structured interviews with a self-selecting sub-sample were conducted to supplement the questionnaire survey data. Out of 160 individual questionnaire respondents from the 101 companies, 13 agreed to be interviewed. The data collected from the Stock Exchange of Thailand Information Products (SETINFO) to support the analysis of the effect of corporate governance on corporate performance include return on equity (ROE) and return on assets (ROA) measures. The quantitative data were processed using a computer program (SPSS) and the qualitative data gathered from the interviews were analysed using content analysis. The results in this study show that after the Asian financial crisis corporate governance in Thailand is improving, and outside/independent directors and professional organisations are playing leading roles. Better corporate governance has resulted from improved internal corporate governance mechanisms and enhanced accounting standards, information disclosure, and auditing standards. In addition, it was found that the implementation of corporate governance was improved, especially in enforcement and disclosure. New and up-dated rules, new and revised laws, and increased regulation are in the forefront of improved corporate governance. Processrelated activities like monitoring, supervising, enforcing, and higher awareness have increased. Moreover, corporate governance practices are now in the spotlight throughout the financial and investment markets. Last, the findings suggest that an expansion of coverage of surveys and an extension of study to the government sector and non-listed companies would be beneficial to generalisability of the results of this study. Future researchers can also extend the investigation to examine the effective monitoring of management by the independent directors, and the characteristics of independent directors to determine whether they are truly independent as this has been shown to improve corporate governance in Thailand.

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