Regional Score Card Initiative Private Sector Initiatives and CG in East Asia 13 September 2006

Background Thai IOD started a CG base-lining evaluation in 2001. McKinsey & Company assisted in developing the evaluation criteria. The World Bank provided funding for data gathering and report compilation. The evaluation criteria and scoring template was adopted by the Philippines, Hong Kong, China and Indonesia.

Evaluation Criteria Based on Five OECD Principles Criteria 2001 2005 2006 Weight (%) Rights of Shareholders 7 23 23 20 Equitable Treatment 10 13 13 15 of Shareholders C. Role of Stakeholders in Corporate 4 8 9 15 Governance D. Disclosure and Transparency 17 32 32 25 Board Responsibilities 16 42 45 25 Total 54 118 122 100 Companies Scored 133 371 402

Evaluation Method Based on publicly available information (Annual Report, report to regulators, Notice and Minutes, Website) Minimize subjectivity in scoring: - Scoring template, scoring methodology. - Commission Sasin Business School. Not dependent on companies’ willingness to participate. Not as detailed as conducted by a rating agency.

B. Equitable Treatment of Shareholders 2005 Results - THAILAND 2005 CG Score by Category Average 100 Best CG 97 97 97 100 92 92 83 80 75 69 69 66 60 53 51 40 48 45 37 20 23 Overall A. Rights of Shareholders B. Equitable Treatment of Shareholders C. Role of Stakeholders D. Disclosure and Transparency E. Board Responsibilities Worst CG

2005 VS 2003 - THAILAND CG Score by Category 2005 2003 + 9 - 6 + 6 Average Best CG + 9 - 6 + 6 + 26 +18 + 8 100 83 80 72 75 69 69 69 66 65 60 60 53 45 40 43 20 Overall A. Rights of Shareholders B. Equitable Treatment of Shareholders C. Role of Stakeholders D. Disclosure and Transparency E. Board Responsibilities Worst CG

2005 Score by Quartile Overall CG Score Best CG Worst CG 100 92 90 80 75 75 70 71 68 68 66 63 60 63 58 50 Worst CG 40 45 Quartile Q 1 Q 2 Q 3 Q 4

2005 TOP Quartile Companies–By Sector No. of Companies Top Quartile % Resources&Energies 13 10 77 % Technology 36 15 42 % Financials 59 21 35 % Services 69 16 26 % Property & Construction 55 14 25 % Industrials 41 7 17 % Consumer Products 38 5 13 % Market for Alternative Investment (MAI) 8 1 Agro & Food Industry 3 7 %

2005 Results Thailand

Board Responsibilities Percentage of analyzed Thai companies with best possible evaluation E.18.1 100% - Appoint Audit Committee. E.12 96% - Provide risk management policy. E.22 92% - The company has Non – Executive Directors > 50%. Strong E.17 88% - Chairman is not also a CEO. E.6 84% The internal audit function has a reporting line to the Audit Committee. E.14 8% - The board conduct annual self assessment. E.23 8% - The company has Independent Director > 50%. Weak E.15 5% The company conducts annual performance assessment of CEO. E.26 4% The company provides an option scheme with period over 3 years and price above market. E.8 2% - The company provides orientation to new directors

2005 - Thailand Corporate Governance Quartiles Average Tobin’s Q Values By Corporate Governance Quartiles Top Quartile 2nd Quartile 3rd Quartile Bottom Quartile Corporate Governance Quartiles

Companies Scored 2003 2004 2005 2006 CHI HKG IND PHI THAI - 100 (Top 100) HKG 168 174 IND 61 (Top 61) PHI 49 (Top 49) 64 (Top 64) THAI 337 371 402

Equitable Treatment of Shareholders Board Respon-sibilities Countries Scored Overall Rights of Shareholders Equitable Treatment of Shareholders Role of Stakeholders Disclosure and Transparency Board Respon-sibilities CHI (2006) 56 37 69 21 81 46 HKG (2005) 71 72 40 90 70 IND 67 88 75 64 PHI 54 45 74 39 36 THAI 66 83 53

Regional Scorecard Observation : Generated awareness and better understanding of CG practices. Stimulated companies to enhance their CG. Endorsement from countries regulators critical to success. Provided a common metrics to measure CG progress and synergy in the region.

Regional Scorecard What next? Expand companies and countries. Develop core criteria for a “Regional Score Card” Raise funds for expansion Regional Conference and recognition Consolidated reporting Regional CG Awards