A SURVEY ON BOARD STRUCTURE OF COMPANIES LISTED ON THE STOCK EXCHANGE OF THAILAND

Abstract

The purpose of this study is to examine the nature and the structure of board of directors based on evidence from Thailand with a view to understand how best the boards function by responding to good corporate governance.A survey was carried out based on 200 companies listed on the Stock Exchange of Thailand (SET) at the end of year 2009. The data was gathered from annual reports of the respective companies. Descriptive statistics are mainly used to analyse and interpret data. For the analysis purposes, companies were grouped as large, medium and small based on revenue. The results find that the board size was fairly large and comprises a majority of non executive directors who are either independent or grey directors thus indicating a clear change in the board structure compared with the past. In the case of large companies, the proportion of grey directors was relatively high. The duality which is characterised by the situation of holding both offices of chairman and CEO by one person was seen in about 15% of the companies. All the firms were found to have established an audit committee with a majority of independent directors. However, the percentage of firms with a remuneration committee and a nomination committee was low but the majority of the committee members were independent. The study further reveals that companies are taking measures to align the board structure in line with general guidelines and principles of good corporate governance thus demonstrating their willingness to act as responsible corporate citizens. Hence, the changes in the board composition in Thailand, an emerging Asian market, show that companies are gradually but steadily taking measures to enhance governance practices by complying with principles and guidelines of good corporate governance.

Key Words - Corporate Governance, Board Structure, Board Size, Board of Directors, Non executive Directors, Committees, Chairman and CEO