GOOD CORPORATE GOVERNANCE: ROLES, DUTIES AND RESPONSIBILITIES OF REMUNERATION COMMITTEE

Abstract

            Since 1997, when Thailand’s economic crisis was partially caused by poor governance, the Thai capital market has awakened to corporate governance principle improvement. Board of director is expected to act in the best interests of the company and shareholders. Remuneration committees were established to increase board effectiveness. Yet extant laws on their role, duty, and responsibility do not suffice to oblige companies listed on the Stock Exchange of Thailand (SET) to remain in compliance with good corporate governance principles. Public Limited Companies Act, B.E. 2535 (1992) and the Securities and Exchange Act BE 2535 (1992) were studied, along with Securities and Exchange Commission Thailand announcements, The Principle of Good Corporate Governance for Listed Companies 2012, and remuneration committee guidelines. These were compared to the United States corporate governance model, influential in developing international capital markets such as Thailand’s.

            Results were that some rules, such as remuneration committee structure, shareholder rights and transparency needed improvement to demonstrate good governance in compliance with international standards. Some corporate governance recommendations should be retained as already conforming to U.S. regulations and international standards. One such is that executive remuneration determination should be a flexible guideline, complied with individually by each company. . Some U.S. legal provisions should not be added, such as exclusive presence of independent members, and individual executive remuneration disclosure.