SINGAPORE (THE BUSINESS TIMES) – Ground-handler and in-flight caterer Sats has emerged top out of 100 Singapore publicly-listed companies in the 2019 Asean Corporate Governance Scorecard (ACGS) – jumping 10 places from its 11th position in 2017 – in results announced on Monday.
Held biennially, ACGS is part of an initiative under the Asean Capital Markets Forum, a high-level grouping of capital market regulators. Apart from Singapore, countries that participated in the latest assessment include Indonesia, Malaysia, Thailand, the Philippines and Vietnam.
The domestic ranking bodies of each country assessed a list of top 100 publicly-listed companies by market capitalisation in their jurisdictions, whereby the top 35 companies from each country then underwent peer review assessment randomly by the domestic ranking bodies of the other countries.
The final scores of these companies were derived after discussion by the ranking bodies, producing a list of companies in Asean that had achieved a minimum score of 75 per cent out of 130 points, a list of the top 20 companies in Asean, and a list of the top three companies in each country.
Across the region, banking group AMMB Holdings placed first in Malaysia, while Bank CIMB Niaga was the front-runner for Thailand.
In the Philippines, property developer Ayala Land came out tops; in Thailand and Vietnam, petroleum and energy conglomerate Bangchak Corporation and information technology company FPT Corporation emerged in first place respectively.
Locally, the National University of Singapore (NUS) Business School’s Centre for Governance, Institutions and Organisations (CGIO), as well as the Singapore Institute of Directors (SID), made up the domestic ranking body. The two have been appointed by the Monetary Authority of Singapore as the Republic’s domestic ranking body for the Asean Corporate Governance Initiative since 2013.
In a joint statement on Monday, CGIO and SID said that Singapore companies “put in a strong showing” this year, with 26 companies scoring at least 75 per cent of the total attainable 130 points.
Coming in behind Sats’ lead with 119.7 points were UOB and the Singapore Exchange, followed by Singtel in fourth place and OCBC in fifth.
On average, Singapore companies scored 88.3 out of 130 points, the highest score to date.
John Lim, chairman of the corporate governance benchmarks committee at SID, said: “It is most encouraging to note the significant improvement in average scores for Singapore’s top 100 companies in the latest assessment, and we commend them on this achievement.”
The ACGS scores comprise two sections of Level 1 and Level 2 scores. The Level 1 score is given based on five components: rights of shareholders, equitable treatment of shareholders, role of shareholders, disclosure and transparency, as well as responsibilities of the board.
Under the Level 2 scores, bonus and penalty points are awarded accordingly.
Companies in Singapore had recorded higher scores across all five components in Level 1 as compared to 2017, with scores in the role of shareholders increasing the most at 2.4 points, while equitable treatment of shareholders increasing the least at 0.1 points.
However, Mr Lim noted that companies “should be able to do even better with greater disclosures of their corporate governance practices”, adding that “good disclosure” is an area where local companies have “lagged” some of its Asean counterparts in recent years.
Of the top 20 publicly listed companies across Asean, Malaysian companies dominated the list – taking up a total of seven spots. Singapore companies came in second at five, while Thailand and the Philippines tied at four companies each.
Lawrence Loh, director of CGIO, NUS Business School, said: “As a member of the Asean market, it is important for Singapore to push the corporate governance standards of Asean as a bloc, so as to increase the attractiveness of Asean to global investors.”
The ACGS was developed by a group of regional corporate governance experts from the domestic ranking bodies, with seed funding from the Asian Development Bank.
It is a tool for Asean companies to improve their corporate governance practices and increase their visibility and investment attractiveness to global investors, and can be used by regulators as a reference for reviewing rules and guidelines to enhance corporate governance practices.