Independent Directors and Corporate Governance in Thailand: A New Frontier

Journal of Transnational Law and Policy, 31 (Forthcoming)

Sydney Law School Research Paper No. 20/26

61 Pages Posted: 20 May 2020 Last revised: 19 Mar 2021

See all articles by Luke R. Nottage

Luke R. Nottage

The University of Sydney - Faculty of Law; The University of Sydney - Australian Network for Japanese Law; University of Wollongong

Date Written: May 13, 2020


Asian companies’ equity offerings and securities markets generally have grown significantly over the last few decades, including in Southeast Asia (Part 1). Yet corporate governance often seems to be undergoing only a gradual transformation, especially in the many economies where government- and family-linked listed companies remain common. Foreign investors and international organisations (including ASEAN) have therefore been pressing for further reforms, including the introduction or strengthening of independent director (ID) requirements to monitor executives and others. This paper compares Thailand, as a mid-tier securities market and economy, building on recent comparisons of larger Asian jurisdictions as well as neighbouring Cambodia.

Part 2.1 explores when and why ID requirements were introduced – as early as 1993. Part 2.2 examines how: initially through mandatory regulation, later supplemented by the Exchange’s comply-or-explain requirements (eg Appendix A), and further encouragement through leading questions posed in annual surveys from an influential directors’ training institute. Part 2.3 delves more deeply into what the ID requirements are. It notes understandable disqualifications for substantial shareholders (or their associates), also found in most Asian securities markets with companies having large blockholders, but also an unusual ex ante disqualification if involved in a competing company. Part 2.4 tries to ascertain who the now large group of Thai IDs is made up of, adding some original empirical analysis including of Thailand’s largest 15 companies in 2019 (Appendix B), noting accounting and other business backgrounds but also engineering and military backgrounds. Part 2.5 then tries to find or predict what impacts come from these IDs, which has also been little researched. They may increase corporate performance generally (a major selling point, despite quite limited empirical support), avoiding collapses or other serious failures, roles connecting companies to outside constituencies including military governments, and influence within ASEAN (eg in Cambodia). Overall, this pioneering analysis suggests that IDs have made a growing difference especially over the last two decades, while identifying ongoing challenges for their effectiveness in monitoring executives and large shareholders, and areas for future research.

Keywords: Asian law, comparative law, corporate governance, securities regulation, law reform, Thailand, ASEAN

JEL Classification: K10, K30

Suggested Citation

Nottage, Luke R., Independent Directors and Corporate Governance in Thailand: A New Frontier (May 13, 2020). Journal of Transnational Law and Policy, 31 (Forthcoming), Sydney Law School Research Paper No. 20/26, Available at SSRN:

Luke R. Nottage (Contact Author)

The University of Sydney - Faculty of Law ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006

The University of Sydney - Australian Network for Japanese Law

Room 640, Building F10, Eastern Avenue
Sydney, NSW 2006

University of Wollongong ( email )

Northfields Avenue
Wollongong, New South Wales 2522

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