91视频

Corporate governance is evolving beyond compliance to encompass accountability, sustainability and long-term value

INDIA

JAPAN

TAIWAN

THAILAND

91视频 corporate governance for foreign-owned companies

Corporate governance remains a central theme for businesses operating in India. High-profile incidents continue to attract public and regulatory scrutiny, from governance and internal control concerns at leading technology platforms, to compliance failures at regional offices of multinationals and concerns raised by independent directors of major banks.

The consequences of governance failures extend beyond legal exposure to include financial, operational and reputational implications affecting investor confidence and long-term enterprise value. Corporate governance is no longer viewed merely as a procedural obligation. It constitutes a broader framework for accountability, risk management, transparency and effective oversight.

Against this backdrop and given 91视频 unique regulatory environment and evolving compliance requirements, navigating the country’s corporate governance landscape remains complex, particularly for foreign-owned companies operating through Indian subsidiaries. Understanding these practical considerations is critical to building resilient and sustainable governance structures in India.

91视频 corporate governance regulatory framework

The Companies Act, 2013, together with corresponding rules and applicable secretarial standards, forms the cornerstone of 91视频 corporate governance framework. It governs company incorporation, management and operations, prescribing requirements for the constitution of board of directors, its powers and obligations, shareholders’ rights, disclosures, audits and financial recordkeeping.

In addition, listed companies are regulated by the Securities and Exchange Board of India (SEBI), specifically SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which impose enhanced governance requirements that are increasingly relevant even to unlisted subsidiaries of listed foreign parents.

Further, companies with foreign investment are also subject to the provisions of the Foreign Exchange Management Act, 1999 regulated by the Reserve Bank of India. Depending on the nature of the business, companies may also be subject to sector-specific regulatory frameworks, such as the Insurance Regulatory and Development Authority of India (IRDAI) regulations for insurance companies.

These laws, together with other applicable labour, environmental and operational laws, impose governance obligations that extend over and above those prescribed under the Companies Act.

The Companies Act places the board at the centre of corporate decision making. Every company must have the minimum prescribed number of directors (two for private companies), with at least one director passing the residency test. Certain companies must also appoint at least one woman director. The board must convene at least four meetings annually, with not more than 120 days between consecutive meetings.

The board is collectively responsible for various functions, including approving the financial statements, preparing the directors’ report and ensuring compliance with applicable legal requirements.

Directors are also subject to individual statutory and fiduciary duties. Directors are required to attend at least one board meeting in a financial year, failing which their office may become vacant. The Companies Act prescribes fiduciary duties requiring directors to act in good faith and in the company’s best interests; exercise due care, skill and diligence; and avoid conflicts of interest.

The Companies Act further incorporates the concept of “officer in default” to determine and assign liability. Typically, executive directors (i.e. directors involved in day-to-day management of the company) and key managerial personnel, such as CEO, CFO and managing director, are considered as officers in default. Non-executive and independent directors may be held liable in limited circumstances, including where the contravention occurs with their knowledge, consent or failure to act diligently.

The governance framework also incorporates checks and balances through shareholder oversight. Certain fundamental decisions require shareholder approval, including changes to the objects clause of the memorandum of association, increase in the authorised share capital and related party transactions (RPT) exceeding prescribed thresholds. The RPT framework is among the most scrutinised areas and warrants careful attention from foreign-owned companies. Additionally, the National Company Law Tribunal provides statutory remedies for oppression, mismanagement and class action suits, giving minority shareholders effective recourse.

To promote transparency, accountability and robust internal controls, the Companies Act prescribes a framework for maintaining books of account and financial statements that present a true and fair view of the company’s affairs; constituting committees such as the audit committee and CSR committee for qualifying companies; and undertaking periodic reporting to regulators.

Statutory auditors play a critical role within the governance framework and are required to independently scrutinise the company’s affairs. Auditors are also under a statutory obligation to report suspected frauds committed by the company, its officers or employees, either internally or to the central government, depending on the value involved.

Challenges and workarounds

Given the complexity of 91视频 corporate governance landscape, foreign investors often encounter structural and operational challenges in ensuring compliance. Key governance challenges and practical guidance to address them are discussed below.

Underestimating Indian compliance ecosystem. India is a compliance-heavy jurisdiction, with obligations spanning multiple laws and regulators at central and state levels. The Companies Act, for instance, requires on average monthly statutory filing. Labour and indirect tax laws impose similar requirements. Routine intra-group arrangements (loans, guarantees, investments) may trigger approval, disclosure or reporting requirements. Companies are therefore required to monitor and manage a continuous cycle of compliance obligations.

This is compounded by frequent regulatory changes. The Companies Act has undergone several amendments since its inception in 2013 and continues to be amended periodically. The rules framed thereunder are also revised frequently, and regulatory circulars and notifications issued by the Ministry of Corporate Affairs add further layers of compliance. Foreign investors often find it challenging to keep pace with these changes and assess their impact on local operations.

One-size-fits-all approach. Multinational groups often implement global governance frameworks across subsidiaries for consistency in compliance standards. However, a one-size-fits-all approach may not be effective in India. Given the country’s unique legal and regulatory landscape, global policies require localisation or supplementation from both legal and practical perspectives.

For instance, global codes of ethics may prescribe monetary thresholds for gifts and hospitality higher than those prescribed under Indian law or prevailing market practice. Similarly, the definition of public servant is wider under Indian anti-corruption laws and may also extend to private sector personnel performing public duties.

Further, centralised decision making from distant headquarters can result in insufficient visibility into local operations and emerging risks, particularly where operations are in smaller cities with a less evolved compliance culture.

Miscalculating the extent of directors’ duties and exposure. Foreign investors often underestimate the extent of duties, responsibilities and potential liability exposure associated with serving as a director of an Indian company, particularly for a foreign resident. While local teams may manage day-to-day operations, directors remain obligated to various statutory and fiduciary responsibilities mentioned above. Depending on the circumstances, directors may be exposed to liability for contraventions of the company, particularly where they failed to act diligently.

A related practical consideration is that global insurance policies for company directors and officers (D&O) may not adequately cover Indian statutory penalties, many of which are quasi-criminal in nature. Companies should review their D&O coverage specifically against Indian exposure.

Another practical consideration relates to disclosures. Directors are required to provide information for various corporate and regulatory purposes (e.g. residential address, contact number and interest in other entities), some accessible publicly for a nominal fee. Companies (Significant Beneficial Owners) Rules, 2018 also imposes complex declaration obligations for multi-layered foreign holding structures. Foreign directors and investors are often surprised by the extent of such disclosure requirements.

While 91视频 corporate governance framework may appear complex, many challenges can be effectively managed through proactive planning and local engagement. Key measures include: (1) conducting a comprehensive regulatory mapping at the outset to identify applicable laws, regulators and filing obligations specific to the company’s sector, structure and investment route; (2) localising global governance policies to align with Indian law; (3) establishing a compliance calendar with clear ownership and escalation timelines; (4) instituting regular board-level training programmes on duties and personal liability exposure under Indian law; and (5) setting up effective internal reporting and whistle-blower mechanisms.

Equally important is engaging experienced local counsel at an early stage – particularly during incorporation, structuring of foreign investment and expansion into regulated sectors – to ensure that governance frameworks are designed with Indian legal requirements in mind. Periodic governance and secretarial audits (mandatory for certain companies) help proactively identify and remediate compliance gaps.

For foreign-owned companies in India, robust governance is no longer merely a compliance requirement; it is a strategic imperative that underpins sustainable growth, protects against director-level liability, preserves stakeholder trust and supports long-term value creation.

JSA ADVOCATES & SOLICITORS
9th Floor, Godrej, Golf Course Road, Sector
42
Gurugram – GCR Haryana 122009 India
Tel: +91 124 439 0600
Email: gurugram@jsalaw.com

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Japan’s corporate governance reform: Key changes in 2026

The starting point of corporate governance in Japan is the Companies Act, which is the principal statute governing corporate organisation and management. For listed companies, however, the regulatory framework also extends to the Financial Instruments and Exchange Act and various rules of the stock exchanges, in particular the Corporate Governance Code formulated by the Tokyo Stock Exchange (TSE).

Although this code is a form of soft law, and not legally binding, it has become a highly influential benchmark for shaping corporate governance of listed companies in Japan.

This is implemented by a so-called “comply or explain” framework under which listed companies are required either to implement each principle of the code or, where they do not, explain any departure from the code.

The Corporate Governance Code was introduced in 2015, and subsequently revised in 2018 and 2021. On 21 July 2026, the Financial Services Agency and TSE finalised and published the latest revised version of the Corporate Governance Code, marking its first update in five years.

This article examines recent developments in Japanese corporate governance, with particular attention to key changes in the 2026 revision of the Corporate Governance Code.

TSE pushes cost of capital

In 2023 the TSE published its “Action to Implement Management that is Conscious of Cost of Capital and Stock Price”, calling on listed companies to analyse their business performance from the perspective of the cost of capital, capital profitability and market valuation. Based on that analysis, companies were encouraged to provide clear disclosure and engage in dialogue with investors.

Earlier this year, on 28 April, the TSE published an update regarding “management that is conscious of cost of capital and stock price”. It emphasises that listed companies should explain their policies about how they allocate management resources to stakeholders and engage in dialogue with the market.

These initiatives reflect longstanding concerns about Japanese companies, including the accumulation of retained earnings, preservation of low-profit businesses, low capital efficiency, and insufficient investment in intangible assets.

Increasing awareness of the price-to-book ratio (PBR) and return on equity (ROE) has contributed to measurable improvements. A comparison between July 2022 and March 2026 shows the PBR and ROE of listed companies on an upward trend. Nevertheless, although capital efficiency and market valuation have improved overall, they continue lagging companies in other countries.

Against this background, the 2026 revision of the Corporate Governance Code expressly requires boards of directors to accurately understand their company’s cost of capital, while formulating and disclosing business strategies and business plans.

The revised code further requires companies to disclose how they appropriately allocate capital and other management resources. This includes explaining growth investments and reviews of business portfolios. The purpose of these disclosures is to show how companies propose to achieve their earnings plans, basic capital policy and targets relating to profitability and capital efficiency set out in such strategies and plans.

In addition, the board of directors is expected to continually review whether management resources are being allocated in a manner that constitutes appropriate risk taking, and that contributes to sustainable growth and medium to long-term enhancement of corporate value.

This includes whether financial assets – such as cash and deposits, together with tangible assets and other management resources – are being effectively utilised for growth investments.

Overall, the 2026 revision establishes a governance framework under which the board itself is expected to explain the balance between medium to long-term growth investment and shareholder returns. In doing so, it responds to longstanding expectations of overseas investors for an integrated explanation of capital efficiency and growth strategy.

Outside directors’ role further strengthened

The 2026 revision of the Corporate Governance Code further strengthens the role of independent outside directors, with a particular focus on enhancing their effectiveness. It emphasises the roles and responsibilities that such directors should fulfill, the importance of maintaining both the quality and number of such directors, and the importance of maintaining the directors’ independence.

It also encourages companies to strengthen the functions of the corporate secretariat, recognising its important role in supporting the board of directors. In addition, for companies listed on the Prime Market (the top market segment of the TSE) that have a controlling shareholder, the revision requires that at least a majority of the board of directors comprises independent outside directors who are independent from the controlling shareholder.

This requirement may be viewed as an effort to align Japan’s corporate governance framework more closely with the corporate governance framework of major overseas markets, strengthening the protection of minority shareholders.

Annual reports before shareholder meetings

Under Japanese law, listed companies must file an annual securities report within three months after the end of each fiscal year. The report is a statutory disclosure document required under the Financial Instruments and Exchange Act. It includes information such as an overview of the company’s principal business, financial performance, risk factors, officers, major shareholders, corporate governance and audited financial statements.

In Japan, annual general shareholders’ meetings are heavily concentrated in June, particularly those companies with fiscal years ending in March. This distinctive market practice has made it difficult for companies to provide disclosure in a timely manner to shareholders, with the consequence that many companies traditionally file their annual securities reports after their annual general meetings.

However, in March 2025, the Minister of State for Financial Services requested listed companies to consider filing their annual securities reports several days before – or at least by the day before – their shareholders’ meetings.

As a result, 57.7% of companies with fiscal years ending in March 2025 disclosed their annual securities reports before their shareholders’ meetings. This was a significant increase from 1.5% for companies with fiscal years ending in March 2024.

Despite this progress, many of those companies with fiscal years ending in March 2025 only filed their annual securities reports just in time, on the day immediately before the shareholders’ meeting. This raised questions about whether such last-minute disclosure is truly useful for shareholders and investors.

The 2026 revision of the Corporate Governance Code now establishes the disclosure of annual securities reports before shareholders’ meetings as a general principle. This change forms a part of a broader effort to create an environment in which shareholders can exercise their rights more effectively at shareholders’ meetings. The revised code also notes that companies should consider making their disclosure at least three weeks before the date of the shareholders’ meeting.

By clearly positioning pre-meeting disclosure as a general principle under the code, and referring to a specific timeframe as a matter for consideration, the revision is expected to encourage companies not merely to make formal disclosures immediately before the shareholders’ meeting, but to disclose their annual securities reports in time that allows shareholders to substantively review their contents.

Whistleblowing strengthens corporate risk management

In recent years, whistleblowing systems in Japan have played an increasingly important role as an early risk detection mechanism for identifying violations of law and misconduct.

As a result, whistleblowing systems are no longer viewed merely as compliance measures. Instead, they are regarded as an integral part of a company’s internal control and risk management framework, which should be overseen by the board of directors.

Under the Whistleblower Protection Act, businesses of a certain size are required to establish whistleblowing systems.

In addition, an amendment to the act scheduled to come into force on 1 December 2026 will place even greater emphasis on ensuring the effectiveness of such systems. Among other changes, the amendments empower the relevant administrative authority to issue an order where a business with more than 300 employees fails to comply with a recommendation concerning its obligation to designate personnel responsible for handling whistleblowing reports. Violation of such an order may result in a criminal fine.

The Corporate Governance Code also requires listed companies to establish appropriate systems for whistleblowing and requires boards of directors to supervise the operation of such systems. Although the current revision does not substantially change the code’s approach to whistleblowing systems, it reorganises matters that were previously set out in supplementary principles into the main principles and guidelines.

As a result, the code adopts a more principles-based structure. These revisions suggest that companies are expected to not only establish formal systems but also ensure the effective operation of whistleblowing systems in light of their own circumstances.

CHUO SOGO LPC
Osaka Dojimahama Tower 15th Floor
1-1-27 Dojimahama, Kita-ku
Osaka, 530-0004 Japan
Tel: +81 6 6676 8834
Fax: +81 6 6676 8839

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Taiwan’s governance reforms drive sustainable value

Taiwan’s corporate governance regime rests on a layered framework comprising the Company Act, the Securities and Exchange Act, and regulations and rulings issued by the Financial Supervisory Commission, the Taiwan Stock Exchange (TWSE), and Taipei Exchange (TPEx).

The extent to which these requirements apply depends on a company’s status, i.e., whether it is privately held, publicly traded, or TWSE/TPEx-listed. Private companies are governed primarily by the Company Act and its general compliance requirements, including rules on shareholders’ meetings, boards of directors, supervisors, and directors’ duties. Public companies are subject to those same rules plus additional requirements on board procedures, internal controls, and disclosure. TWSE/TPEx-listed companies, in turn, face the most intensive regime, extending to ESG evaluation, sustainability reporting and disclosure, investor engagement, and board accountability.

The reach of this top tier reflects a broader shift in regulatory priorities. In recent years, Taiwan’s policy focus has shifted from traditional concerns such as board organisation, shareholders’ meeting procedures, and disclosure compliance on ESG, sustainable development, information transparency, and long-term corporate value. This shift is also anchored in the Company Act. Article 1 of the Company Act was amended in 2018 not only to require companies to comply with laws and business ethics, but also expressly permit them to undertake actions that promote the public interest in furtherance of their corporate social responsibility. This provision does not create a separate fiduciary duty owed to society or all stakeholders; rather, it provides boards with a legal basis to weigh the public interest, business ethics, and social responsibility when discharging their fiduciary duties.

Board fiduciary duties drive sustainability

Under the Company Act, responsible persons of a company (including its directors and supervisors) must faithfully perform their fiduciary duties in managing the company’s business. This includes, among other things, exercising the care of a good administrator and acting in the company’s best interests rather than pursuing their own or a third party’s. As governance and sustainability rules evolve, boards are increasingly expected to factor sustainability risks, business ethics, stakeholder interests, and long-term value into their oversight and business decisions.

For private companies in Taiwan, sustainability governance generally does not take the form of mandatory ESG reporting or capital market disclosure. It is reflected instead in general compliance with labour, environmental, tax, personal data, consumer protection, and various laws, together with the voluntary weighing of ethics, public interest, reputational risk, and social responsibility in day-to-day operations.

For public and listed companies, the expectations are even higher. Public companies must comply with specific rules governing corporate procedures and internal controls. Listed companies are expected to go further by adopting sustainability policies, systems, or management guidelines and concrete action plans that reflect sustainability trends, the relevance of those trends to their core business, and their operational impact on stakeholders. Such policies and plans are to be approved by the board and reported to the shareholders’ meeting. Directors, for their part, are expected to drive implementation, review results, and pursue continuous improvement, weigh stakeholder interests, embed sustainability into operations and strategy, and ensure timely and accurate disclosure. To support this, listed companies are advised to establish a sustainability governance framework, designate dedicated or part-time units (e.g., an ESG committee), and report regularly to the board.

In short, sustainable development is given effect through institutionalised board oversight, risk identification and management, dedicated units and functional committees, disclosure quality, and stakeholder communication. Further guidance is outlined in the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.

ESG evaluation and disclosure evolution

External evaluation and sustainability disclosure have become essential tools for integrating sustainability into corporate governance and capital market oversight.

From corporate governance evaluation to ESG evaluation. In 2014, Taiwan introduced the Corporate Governance Evaluation as a market-based assessment mechanism for all TWSE and TPEx-listed companies, forming a key part of its corporate governance reform roadmap. This evaluation has served as a policy instrument to encourage companies to enhance board effectiveness, protect shareholder rights, improve information transparency, and strengthen overall corporate governance.

In 2026, the Corporate Governance Evaluation was renamed the ESG Evaluation, reflecting an expanded scope that extends beyond governance to encompass the environmental and social dimensions. Its inaugural indicators include environmental management, human rights due diligence, investor engagement, employee rights, family-friendly workplace policies, sustainability governance, and board accountability.

Sustainability reporting. Disclosure obligations have expanded along the same trajectory. From 2025, all TWSE/TPEx-listed companies must prepare and file annual sustainability reports that disclose material economic, environmental and people-related topics and impacts, ESG risk assessments, and performance indicators. The reports must also explain how their sustainability policies are implemented in actual operations rather than offering only high-level statements. From the 2026 fiscal year, TWSE/TPEx-listed companies must apply the IFRS Sustainability Disclosure Standards in stages according to paid-in capital and disclose sustainability-related financial information in a dedicated chapter of the annual report. This brings sustainability information closer to financial reporting and recognises that information on climate- and sustainability-related risks, governance, strategy, metrics, and targets is material to investors.

Non-listed companies are generally not subject to mandatory sustainability reporting. As ESG carries ever greater weight, however, many will still need to adopt ESG management practices or systems, whether driven by supply chain requirements, the expectations of financial institutions, or environmental and other regulations. Introduced in 2025, article 387-1 of the Company Act mandates that all companies complete labour rights training after their registration. This requirement signifies that the social and compliance pillars of ESG are extending to private companies down to baseline compliance and labour rights awareness.

Taiwan governance reforms integrate ESG

Recent legislative amendments and regulatory policies indicate that Taiwan’s corporate governance reforms have evolved beyond independent directors, functional committees, and procedural compliance. The governance framework is becoming more integrated, in which environmental responsibility, labour rights, information quality, and stakeholder interests bear directly on how a company is run and judged. Governance is increasingly assessed not just by procedural adherence, but by the substance of a company’s sustainability practices and the credibility of its disclosures.

Investors and businesses establishing or investing in Taiwan should note that applicable obligations still depend heavily on the company type and market status, but regardless of that status, sustainability and stakeholder considerations are shifting from voluntary best practices to baseline expectations. Companies that embed ESG principles as fundamental governance elements will be best positioned to thrive as these standards continue to tighten.

LEE AND LI ATTORNEYS-AT-LAW
8F, No. 555, Sec. 4
Zhongxiao E. Rd.
Taipei 110055 Taiwan
Tel: +886 2 2763 8000
Email: attorneys@leeandli.com

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Managing risks in Thailand through effective corporate governance

Corporate governance is not a new concept in Thailand. The principles are embedded in various Thai laws, regulations and guidelines (for example, the Corporate Governance Code for listed companies issued by the Securities and Exchange Commission of Thailand).

However, with the increasing importance for companies to operate within the framework of environment, social and governance (ESG) and to implement its principles in business practices, there is a renewed focus for companies to review their own corporate governance policies and practices to ensure that they are aligned with not only Thai laws and regulations but also international norms.

This may be particularly significant for companies operating upstream or downstream as part of a global supply chain. The current volatile nature of the global economy means that companies must have robust corporate governance structures in place to mitigate against potential business disruptions.

This article not only touches on the “G” side of ESG, which is directly relevant to corporate governance, but we will also explore how the “S” side may be just as necessary, as governance and social issues are often interconnected.

Bridging departmental gaps in governance

Companies are typically structured to include various departments or groups, and it is possible that groups responsible for overseeing specific sides of the company’s corporate governance framework may not be connected to each other. For example, in procuring products or services or engaging third-party contractors, the company’s operational, procurement, legal/compliance and finance teams may be reviewing different components of transactions.

Gaps in control and oversight processes may appear if the company lacks appropriate mechanisms (including relevant policies and procedures) to address these issues. These gaps can lead to systematic issues for the company. For instance, the authors have seen a large number of fraud and conflict of interest cases in procurement processes. Often, these issues occur because the company has inadequate corporate governance structures in place.

Integrating harassment prevention across functions

Another example could be in relation to sexual harassment prevention measures. Sexual harassment is an area that is receiving greater scrutiny in Thailand with recent changes to key laws (including under the Penal Code). These now include provisions that deal specifically with sexual harassment. This appears to align with trends globally.

In Thailand, employees are raising concerns about sexual harassment on an increasing basis. Given these developments in the “S” side of ESG, companies must ensure that they develop measures relating to the prevention of sexual harassment to protect employees.

However, these measures are only effective if the human resources department works in tandem with other company functions to integrate sexual harassment prevention measures into other corporate governance structures. Failure to do this may lead to the sexual harassment prevention measures becoming ineffective, exposing the company to potential legal, regulatory or reputational risks.

Tone from top drives governance

The first step for creating an effective corporate governance programme for any company is to have a clear “tone from the top”. The management of the company, including the board of directors, must show their commitment to good corporate governance not only in rhetoric, but also in their actions. This means providing appropriate and adequate resources, investment and planning to meet the corporate governance requirements.

Management are also responsible for creating, fostering and protecting a culture within the company that puts corporate governance at the heart of all decision making processes and encourages employees to speak up if they are aware of issues that may impact the company from a corporate governance perspective. The protection of this culture can be done by having measures in place to allow employees to report concerns in a confidential manner, while also having robust mechanisms to protect employees who make reports in good faith, and prevent retaliation.

In order to fully implement the company’s corporate governance culture, the company should then create appropriate policies and procedures to provide adequate guidelines, structures and frameworks for management and employees.

The policies and procedures that a company should create and implement are different for each company, and may ultimately also be dependent on their operations and risk profile. It may therefore be necessary for the company to undertake an internal review to identify such operational issues and their related risks.

At a minimum, companies should consider implementing policies and procedures that deal with the key risks faced by all companies. For example, a company should have policies and procedures dealing with: its procurement processes; financial/accounting controls (including control over use of assets); human resource management; and key legal, regulatory or compliance issues (such as issues related to anti-bribery or anti-money laundering measures, conflicts of interest, interactions with competitors, and protection against workplace discrimination or harassment).

The application of a company’s policies and procedures may not be limited to its internal stakeholders, but can also be used for interactions with external parties. The need for this may be based on specific interactions with third parties, and what risks they may pose to the company’s operations. This may extend to suppliers, contractors, business partners, customers or other third parties. The third parties that the company interacts with should also be subject to appropriate due diligence processes where necessary. An illustration of where this may be important from a corporate governance perspective is in the engagement of vendors or suppliers, where the company will want to ensure that it is entering into a relationship with a reputable party, free from any conflicts of interest with the company.

Another instance related to the “S” side is the growing trend in terms of the use of human rights due diligence (HRDD) as a proactive measure to handle human rights issues (including in relation to forced labour). In Thailand, there is currently no specific legislation that imposes obligations on companies to conduct HRDD, but some companies are being required by external parties to conduct HRDD to ensure their business practices are ethical and do not violate human rights or other legal obligations.

Having policies and procedures in place may not be sufficient if they are not implemented in practice. The company should ensure that its policies and procedures are made readily available to all relevant stakeholders (internal and external) through appropriate channels.

One of the key implementation tools for such stakeholder engagement (especially with the company’s own employees) may be through the development of training programmes, which may combine both online resources with in-person sessions. For companies operating in Thailand, arranging in-person sessions in Thai may be one of the most effective ways to deliver the training and allow employees the opportunity to raise questions or seek guidance.

Finally, a company’s corporate governance structure does not remain static, but should be evolving based on the nature of each business. Companies will therefore be required to continually monitor the effectiveness of their corporate governance structure to meet the changes they may face. This may involve the use of internal or external audits to review company practices.

Corporate governance turns policy real

Ultimately, corporate governance should be viewed not merely as a set of policies or compliance requirements, but as the operating framework that ensures risk mitigation and compliance measures are translated into practice. A strong corporate governance structure creates clear accountability, connects the responsibilities of different functions, embeds controls into day-to-day decision making, and allows management to monitor whether policies are being properly implemented and remain effective.

Corporate governance becomes the mechanism through which a company can identify risks early, respond to them consistently, and demonstrate that its commitment to legal, regulatory and ethical standards is real, measurable and sustainable.

BAKER MCKENZIE
195 One Bangkok Tower 4
30th – 33rd Floors, Wireless Road,
Lumphini, Pathum Wan, Bangkok 10330
Tel: +66 2636 2000
Email: Bangkok.Info@bakermckenzie.com

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