The impact of corporate governance disclosure on the financial performance of SSI30 companies

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY Vu Thi Thu Van THE IMPACT OF CORPORATE GOVERNANCE DISCLOSURE ON THE FINANCIAL PERFORMANCE OF SSI30 COMPANIES MASTER THESIS In Banking Ology code: 60.31.12 Supervisor: Dr Pham Huu Hong Thai Ho Chi Minh City, 2011 Acknowledgements Hereby, the writer would like to express her heartfelt thanks to Dr Pham Huu Hong Thai for his great instruction to complete this thesis, to the professors & the teachers for building up her understanding & her good acting and to her loved ones for their contribution to meaning of her life Abstract Experience in countries with large and active equity markets shows that disclosure can also be a powerful tool for influencing the behavior of companies and for protecting investors A strong disclosure regime can help to attract capital and maintain confidence in capital markets Insufficient or unclear information may hamper the ability of markets to function, may increase the cost of capital and result in a poor allocation of resources However, in Vietnam, Corporate governance is still a new concept And The World Bank asses that investor protection is inadequate; related-party transactions are pervasive; compliance with accounting standards is insufficient; and disclosure and transparency are limited Therefore, this paper is motivated to give in further detail at what level the quality of annual reports in Vietnam is by using the Standard & Poor‟s scorecard to rate and to investigate the impact of corporate governance disclosure on the financial performance in order to illustrate why the pursuit of better corporate governance practices can be of genuine and practical benefit to companies themselves As a fact, the annual reports viewed in this study are mainly with introduction, advertising, financial statement, balance sheet …., not reporting about corporate during the year as it is With correlation, relationships between financial performance and corporate governance disclosure expected are not seen from the samples Keywords: Corporate Governance, Corporate Governance disclosure score, annual reports, financial performance Table of content Chapter Introduction Chapter Literature review on corporate governance in general and on disclosure of corporate governance in particular 2.1 Theoretical Literature Review 2.2 Empirical Literature Review 10 Chapter Research methodology 20 3.1 The sample 20 3.2 Research methodology 20 Corporate Governance Disclosure Scorecard Financial Performance 20 21 Correlation 22 Chapter Findings & Discussion 23 4.1 Corporate governance disclosure scores 23 4.2 Financial performance 31 4.3 Correlation 32 Chapter Conclusion 36 References 43 Appendix CG Disclosure Scorecard (Standard & Poor's) 48 Appendix List of Tables 56 Appendix List of Figures 57 CHAPTER INTRODUCTION Statement of problems The corporate governance issue has beccome of great interest those days Both Asian countries and international organizations launched some initiatives to enhance corporate governance For example, the Organization of Economic Cooperation and Development (OECD) issued a document entitled „Principles of Corporate Governance‟ in 1998 and a revised version in 2004 (OECD, 2004) according to which Corporate governance is a key element in improving economic efficiency and growth as well as enhancing investor confidence The presence of an effective corporate governance (CG) system, within an individual company and across an economy as a whole, helps to provide a degree of confidence that is necessary for the proper functioning of a market economy As a result, the cost of capital is lower and firms are encouraged to use resources more efficiently, thereby supporting growth The Cadbury Committee (1992) advocated, first of all, disclosure as “a mechanism for accountability, emphasizing the need to raise reporting standards in order to ward-off the threat of regulation Improved disclosure results in improved transparency, which is one of the most essential elements of healthy CG practices.” Communication via corporate disclosure is selfevidently a very important aspect of CG in the sense that meaningful and adequate disclosure enhances good CG For instance, Whittington (1993) states: “Published annual reports are used as a medium for communicating both quantitative and qualitative corporate information to shareholders, potential shareholders (investors) and other users” Although publication of an annual report is a statutory requirement, companies normally voluntarily disclose information in excess of the mandatory requirements Company management recognizes that there are economic benefits to be gained from a well-managed disclosure policy However, in Vietnam, Corporate governance is still a new concept As per the recent International Finance Corporation – Mekong Private Sector Development Facility survey in Vietnam, only 23% of the companies surveyed understand the basic concept of Corporate Governance, and there remains confusion between “governance” and “management” between company directors And The World Bank asses that investor protection is inadequate; related-party transactions are pervasive; compliance with accounting standards is insufficient; and disclosure and transparency are limited (Report on the Observance of Standards and Codes 2006) And relatively little research work has been done in the area of corporate governance in Vietnam If it is widely perceived that new laws and regulations to promote better corporate governance practices just end up creating additional (and unnecessary) burdens for companies, then their effectiveness will be limited Furthermore, it is important that any drive to improve corporate governance practices seek to illustrate why the pursuit of better corporate governance practices can be of genuine and practical benefit to companies themselves.( Freeman & Nguyen 2006) As per the assessment of World Bank, Quality of disclosure in the annual reports of Vietnamese listed companies is not adequate and is not in compliance with OECD non-financial disclosure requirements The quality of disclosure is low while a strong disclosure regime is an important feature of marketbased monitoring of corporate conduct and is central to the ability of shareholders to exercise their voting rights effectively Experience in countries with large and active equity markets shows that disclosure can also be a powerful tool for influencing the behavior of companies and for protecting investors A strong disclosure regime can help to attract capital and maintain confidence in capital markets Shareholders and potential investors require access to regular, reliable and comparable information in sufficient detail for them to assess the acting of management and make informed decisions about the valuation, ownership and voting of shares Insufficient or unclear information may hamper the ability of markets to function, may increase the cost of capital and result in poor allocation of resources Disclosure also helps improve public understanding of the structure and activities of companies, their policies and performance with respect to environmental and ethical standards and their relationships with the communities in which they operate Research Objectives Therefore, this thesis is motivated to give in further detail at what level the quality of annual reports in Vietnam is by using the Standard & Poor‟s (S&P) scorecard to rate and one more objective is to investigate the impact of corporate governance disclosure on the financial performance, respectively as a support to above suggestion by Freeman & Nguyen (2006) for the illustration why the pursuit of better corporate governance practices can be of genuine and practical benefit to companies themselves Significance of the thesis This study gives a closer and more detailed fact of the Corporate Governance in Vietnam instead of saying, describing it in general at starting From the figure of this research, in comparison with other countries and from the test, the readers could imagine clearer and exactly at which level Vietnam is , how far Vietnam is behind and how much work Vietnam should This helps enhance public awareness and training on corporate governance The findings suggest direction for further research, as well as give suggestions for Companies & policymakers to consider Hypothesis statement And in this thesis, the following hypothesis suggested by Abdo & Fisher, 2007: “Companies with high levels of corporate governance disclosure will achieve higher firm valuations and more significant prospects for future growth than companies with low levels of corporate governance.” is tested Data & Methodology The publicly annual reports & financial ratios of some Vietnamese companies belonging to the group of largest market capital with the 30 firms updated by Saigon Securities Inc., (SSI30 Update) on 31 Dec 2009 have been taken under method of descriptive statistics to compute the linear correlation coefficient between the corporate governance disclosure score and the market to book value ratio, between the corporate governance disclosure score and the Price per Earnings ratio as well The study follows the ones done in some other Asian countries applying S&P scorecard to make out the scores of sample then will evaluate the financial performance with Market-to-book-value (MTBV) and Price/earnings (P/E) ratio Lastly, correlation with financial performance as dependent variable and Corporate Governance Disclosure score as independent variable is computed The results of CG disclosure rating for the Vietnamese companies are low, even lower than the figure of neighbor Asian countries in 2004 And the result of test is not in line with the hypothesis Organization of thesis The thesis includes five chapters Its remainder is structured as follows: The chapter two reviews the relevant literature on corporate governance in general and disclosure of corporate governance in particular The third chapter presents research methodology The results are reported and discussed in the chapter four And the last chapter concludes the thesis CHAPTER LITERATURE REVIEW ON CORPORATE GOVERNANCE IN GENERAL AND ON DISCLOSURE OF CORPORATE GOVERNANCE IN PARTICULAR 2.1 Theoretical literature review Corporate governance has received an increasing amount of attention in recent years Corporate scandals have brought corporate governance weaknesses to the attention of the general publics, especially in the United States But corporate governance is sometimes a problem in other countries as well (W McGee, 2008) At UNCTAD‟s 10th quadrennial conference, which was held in Bangkok in February 2000, member States requested it to promote increased transparency and improved corporate governance In response, the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) at UNCTAD conducted a series of consultations and deliberations on corporate governance disclosure during its annual sessions with a view to assisting developing countries and countries with economies in transition in identifying and implementing good corporate governance practices This was undertaken as part of the larger goal of achieving better corporate transparency and accountability in order to facilitate investment flows and mobilize financial resources for economic development Corporate Governance Committee of Hong Kong Society of Accountants, in March 2001, published the book “A guide to Current Requirements and Recommendations for Enhancement on Corporate Governance Disclosure in Annual Reports” which introduced that Hong Kong was able to weather the storm better than many other Asian economies because the Special Administrative Region has on of the highest standards of corporate governance in Asia With a global economy, corporate governance standards must also be global Consequently, those Hong Kong companies whose governance systems are not compatible with international standards will lose out in terms of attracting international investment More than 70 per cent of the international capital market is made up of United States and United Kingdom pensions, funds, and the other institutional investors These investors are keen on reducing risk One of the principal ways in which they can this is by going to markets where governance practices are comparable to those in their home markets If Hong Kong is to maintain its status as a major international finance centre and capital market, Hong Kong companies must play by global rules, particularly those relating to full and timely disclosure Corporate governance is not an optional extra for Hong Kong companies It is essential and overriding element in attracting investment and stimulating economic growth In general, the United Nations Conference on Trade and Development‟s “Guidance on Good Practices in Corporate Governance Disclosure (2006)” describes: “The location of CG disclosures within the Annual Report of a Corporation is not generally well-defined, and can vary substantially across-country in practice However, some degree of harmonization of the location of CG disclosures would be desirable to make the relevant data more accessible, in the long-run.” Related study regarding developing a governance scorecard As per Barrier (2003), there were seven primary characteristics of good corporate governance identified by The King Committee: discipline, fairness and social responsibility – and The Committee further developed and integrated these fundamental principles into tangible guidelines for minimum standards of corporate governance 46 La Porta,R Silanes, F.L Shleifer, A & Vishny, R 1999, "Investor protection and corporate governance", Journal of Financial Economics 58 (2000) 3-27 La Porta,R Silanes, F.L Shleifer, A & Vishny, R 2002, "Investor protection and corporate valuation", Journal of Finance, 57: 1147-70 Liu,Q & Lu,Z.J 2007, "Corporate governance and earnings management in Chinese listed companies: A tunneling perspective", Journal of Corporate Finance 13 (2007) 881 – 906 Lombardo, D and Pagano, M 2000, “Legal determinants of the return on equity.”, Working Paper no 193 (Stanford Law School) Lowry, R 1999-2010, “ Concepts and Applications of Inferential Statistics”, Accesed at http://faculty.vassar.edu on 30 September 2010, Chapter Madan, L.B 2008, “Corporate Governance Disclosure Practices: The portrait of a Developing Country”, International Journal of Business and Management (2008) McGee, R.W 2008, "Corporate Governance in Asia: A comparative study", Working paper - Florida International University Mehran, H 2004, " Corporate governance in the banking and financial services industries", Journal of Financial Intermediation 13 (2004) 1-5 Pathan, S Skully, M & Wickramanayake, J 2006, " Reforms in Thai bank governance: The aftermath of the Asia financial crisis", International Review of Financial Analysis 17 (2008) 345-362 Patibandla, M 2005, "Equity pattern, corporate governance and performance: A study of India's corporate sector", Journal of Economic Behavior & Organization Vol 59 (2006) 29 – 44 Rajagopalan, N & Zhang, Y 2007, "Corporate governance reforms in China and India: Challenges and opportunities", Business Horizons (2008) 51, 55-64 Shleifer, A and Vishny, R 1997 “A survey of corporate governance.” Journal of Finance, 52: 737-83 47 Skaife, H.A Collins, D.W & LaFond, R 2006, "The effects of corporate governance on firms' credit ratings" Journal of Accounting and Economics 42 (2006) 203 – 243 Standard & Poor‟s and Corporate Governance and Financial Reporting Centre NUC Business School, National University of Singapore 2004, “Corporate Governance Disclosures in Hong Kong – A study of HSI companies.” Standard & Poor‟s and Corporate Governance and Financial Reporting Centre NUC Business School, National University of Singapore 2004, “Corporate Governance Disclosures in Malaysia” Standard & Poor‟s and Corporate Governance and Financial Reporting Centre NUC Business School, National University of Singapore 2004, “Corporate Governance Disclosures in Singapore – A study of STI companies.” Standard & Poor‟s and Corporate Governance and Financial Reporting Centre NUC Business School, National University of Singapore 2004, “Corporate Governance Disclosures in Thailand – A study of SET50 companies The Organization of Economic Cooperation and Development (OECD), 2004, “Principles of Corporate Governance”, revised version The World Bank, 2006, "Corporate Govenance Country Assessment", Report on the Observance of Standards and Codes (ROSC) - Corporate Governance United Nations Conference on Trade and Development, 2006, “Guidance on good practices in Corporate Governance Disclosure” , Preface Xie, B Davidson III, W.N & DaDalt, P.J 2002, “Earnings management and corporate governance: the role of the board and the audit committee", Journal of Corporate Finance (2003) 295 - 316 Whittington, G 1993, “Corporate Governance and the Regulation of Financial Reporting,” Accounting and Business Research, 23 (91A), pp 311-319 Yermack, D 1996 “Higher market valuation for firms with a small board of directors.” Journal of Financial Economics 40: 185-211 48 Appendix CG Disclosure Scorecard (Standard & Poor's) Board matter Is the frequency of board meetings disclosed? Did the board meet more than times in the year? Did the board meet more than times in the year? Did the board meet more than times in the year? Did the board meet 12 time or more in the year? Is the aggregate board attendance disclosed? Are directors attending over 60% of the board meetings? Are directors attending over 80% of the board meetings? Are directors attending 100% of the board meetings? 14 10 Do independent directors constitute more than 1/3 of the board? 11 Do independent directors constitute more than 1/2 of the board? 12 Do independent directors constitute more than 2/3 of the board? 13 Is attendance of individual directors at board meetings disclosed? Does the company's M&A allow for telephonic or videoconference meetings? 15 Is there disclosure of company's guidelines of matters that require approval by the board? 16 Do the guidelines dicslose the type of material transactions that must be approved by the board? 17 18 Does the company have a traning program for all of its directors? "Are the details of training provided to directors dicslosed? (like number of directors sent for training, where did they receive the training, etc.)" 19 20 Is there an orientation program for all new directors? Does orientation program cover the company's business and goverance practices? 49 21 "Does the company provide ongoing training on new laws, regulations and changing commercial risks?" 22 Is the complete list of board members disclosed? 23 "If answer to #22 is yes, is detailed information on each director disclosed?" 24 "If answer to #22 is yes, does it include details of previous employment?" 25 "If answer to #22 is yes, are educational qualifications of directors discolsed?" 26 "If answer to #22 is yes, are other directorships of directors discolsed?" 29 27 Is each director is classed as independent or not by name? 28 Has the board reviewed the size of the board? Has disclosure been made of the factors and criteria in determining the size of the board? 30 Are the chairman and CEO positions held by same (S)/relatedR / unrelated (U) persons? 31 Are the chairman's responsibilities with respect to board proceedings disclosed? 32 "If answer to #28 is yes, they include matters such as scheduling board meetings, preparation of agenda for board meetings, control over information flows between management and the board, and compliance with company's guidelines on corporate governance?" 33 Are all directors required to seek nomination and re-election at regular intervals? 34 35 Are directors' service contracts for periods not more than years? Does the board have separate and independent access to company's senior management? 36 Is the board provided with supporting background and explanatory information for matters brought before the board? 37 Does the board receive explanation of variances between projections (budgets) and results? 50 38 Does the board have separate and independent access to the company secretery? 39 40 Is the role of the company secretary defined? "If answer to #36 is yes, does it include responsibility for ensuring that board procedures are followed and compliance of applicabe rules and regulations?" 41 42 Does the company secretary attend all board meetings? Does the company have an agreed procedure for directors to take independent professional advice? 43 Does the management provide the board with monthly management accounts? Nominating matters 49 44 Does the company have a nominating committee? 45 Is the list of members of the nominating committee disclosed? 46 Is the majority of nominating committee independent? 47 Are all members of the nominating committee independent? 48 Is the chairman of the nominating committee independent? Does the nominating committee make reconmmendations on all board appointments? 50 51 Are the nominating committee's terms of reference in writing? "If answer to #50 is yes, these describe responsibilities of the nominating committee's members?" 52 "Does the nominating review, at least annually, whether or not a director is independent?" 53 "Does the nominating committee review adequacy of time spent by directors, who have multiple directorships, on affairs of each company?" 54 Is disclosure made of directors' particulars where their names are submitted for election/re-election? 55 Is disclosure made of dindividual member's attendance at the nomination committee (NC) meetings? 51 63 56 Is the frequency of NC meetings disclosed? 57 Did the NC meet more than times in the year? 58 Did the NC meet more than times in the year? 59 Was the attendance at NC meetings more than 60%? 60 Was the attendance at NC meetings more than 80%? 61 Was the attendance at NC meetings 100%? 62 Is the appraisal of board performance conducted? Has the nominating committee established criteria for evaluation of performance of the board? 64 "Is disclosure made of the process of board evaluation? (e.g., conducted by external party, conducted by NC, by shareholders etc.)" 65 "Is criteria for evaluating board performance disclosed? (e.g., company's share price performance over past years; return on assets; return on equity; return on investment; economic value added; profitability on capital employed)" 66 67 Is individual performance of board members evaluated? "If the anser to #66 is yes, is criteria for individual director performance evaluation disclosed?" 68 "Is disclosure made of the process of director evaluation? (e.g., conducted by external party, conducted by NC, by shareholders etc.)" Remuneration matters 73 69 Does the company have a remuneration committee? 70 Is the list of remuneration committee members disclosed? 71 Is the majority of RC independent? 72 Are all members of the RC independent? Is the remuneration committee chaired by an independent non-executive director? 74 Is disclosure made of individual members' attendance at the remuneration committee meetings? 75 Is the frequency of RC meetings disclosed? 52 81 76 Did the RC meet more than times in the year? 77 Did the RC meet more than times in the year? 78 Was the attendence at the RC meetings more than 60%? 79 Was the attendence at the RC meetings more than 80%? 80 Was the attendence at the RC meetings 100%? Is at least one remuneration committee member knowledgeable about executive compensation? 82 Does the remuneration committee recommend to the board a framework of remuneration for the board and key executives? 83 Does the remuneration committee determine specific remuneration packages for executive directors and the CEO? 84 Are the remuneration committee's recommendations submitted for endorsement by the entire board? 85 "Does the remuneration committee's review include all aspects of remuneration (such as salaries, fees, allowances, bonuses and options)?" 86 "Is disclosure made of the remuneration committee's processes (e.g., external compensation specialists hired) to ascertain industry practices and salary levels for pay and employment conditions?" 87 "Is executive director compensation linked to industry, company and/or individual performance?" 88 Is the percentage of performance-related elements of executive directors' remuneration above 50%? 89 "Is compensation of non-executive directors linked to their level of contribution and responsiblities, and time spent and effort?" 90 Were industry experts consulted on the remuneration of non-executive directors? 91 Has the board recommended all components of non-executive director compensation for approval at the annual general meeting? 92 Do service contracts for directors contain onerous removal clauses? 53 93 Did the remuneration committee consider the appropriateness of compensation commitments for early termination of directors? 94 95 Are directors prenvented from deciding on their own remuneration? "Does director remuneration include long-term incentives?(E.g., bonuses payable after 12 months and/or share option with a vesting period > 12 months)" 96 Is disclosure made to shareholders of remuneration of executive directors? 97 Is disclosure made to shareholders of remuneration of non-executive directors? 98 Is disclosure made to shareholders of remuneration of top executives who are not directors? 99 "is disclosure made of components of remuneration analyzed by salaries, variable bonuses, options and long-term incentives?" 100 101 Is full disclosure made of remuneration of each director by name? Is disclosure made of remuneration to an employee who is an immediate family member of a director or the CEO? Is there are no such an employees is this disclosed? 102 "Is the company has any shares/options for employees/directors, are the details of these disclosed (shares issued to employees or options granted)? If it does not have such schemes, is this fact disclosed?" Audit matters 103 Is the list of audit committee members disclosed? 104 Is the majority of audit committee independent? 105 Is the entire audit committee independent? 106 Is the chairman of the audit committee independent? 107 Is the disclosure made of the basis selection of audit committee mebers? 108 Do at least memebers of the audit committee have accounting experience or related finanacial management expertise or experience?(This could either be an accounting or financial qualification or previous work experience in financial or investiment positions.) 54 109 Is disclosure made of individual audit committee members attendance at audit committee meetings? 119 110 Is the frequency of audit committee disclosed? 111 Did the audit committee meet more than times in the year? 112 Did the audit committee meet more than times in the year? 113 Did the audit committee meet more than times in the year? 114 Did the audit committee meet more than times in the year? 115 Was the attendance at audit committee meetings more than 60%? 116 Was the attendance at audit committee meetings more than 80%? 117 Was the attendance at audit committee meetings 100%? 118 Does the audit committee have its terms of reference in writing? Does the audit committee have authority to investigate any matter within its terms of reference? 120 Does the audit committee have access to and cooperation of management? 121 Does the audit committee meet with external auditors in the absence of company management? 122 "Does the audit committee review scope, results and effectiveness of audits?" 123 Does the audit committee meet with internal auditors at least annually? 124 Does the audit committee meet with external auditors at least annually? 125 Does the audit committee review independence of external auditors annually? 126 Is an annual review conducted of company's internal controls and risk management? 127 Does the annual report include a statement by the board on adequacy of internal controls? 128 Does the internal auditor report primarily to the chairman of the audit committee? 129 "Does the internal auditor meet standards set by recognised professional bodies (e.g., Institute of Internal Auditors)?" 55 130 Does the audit committee review adequacy of internal auditor's resources? 131 Does the audit committee annually review adequacy of internal audit function? Communication 132 Does the board provide shareholders with quarterly reports on the business and prospects even if it is not mandatory? 133 Are the chairmen of all board committees existing present at the AGM to answer shareholders' questions? 134 Are external auditors present at annual general meetings to assist responses to shareholders? 135 Are separate resolutions poroposed at the AGM for each distinct issue? (i.e no resolutions are bundled together) 136 "Does the company have its annual reports on its Web site?" 56 Appendix List of Tables Table 1: Summary Statistics of CG Scores for 27 of SSI 30 UPDATE companies Table 2: CG Disclosure Scores of companies winning the Best Annual Report Award Table 3: Summary Statistics of CG Disclosure Scores between some Asian countries Table 4: Scores, MTBV, P/E ratio for 27 of SSI30 UPDATE companies 57 Appendix List of Figures Figure 1: Distribution of Scores Figure 2: Proportion of Independent Directors Figure 3: Disclosure of Directors‟ Details Figure 4: Chairman-CEO Separation Figure 5: Number of Board of Meetings Figure 6: Scatter plot of CG Disclosure Scores and MTBV Figure 7: Scatter plot of CG Disclosure Scores and P/E ratio 58 NHỮNG KẾT QUẢ ĐẠT CỦA ĐỀ TÀI: “THE IMPACT OF CORPORATE GOVERNANCE DISCLOSURE ON THE FINANCIAL PERFORMANCE OF SSI30 COMPANIES” HỌC VIÊN: VŨ THỊ THU VẤN - Đã khắc phục khó khăn để nghiên cứu đề tài không Việt Nam mà giới - Đã cố gắng tiếp cận Corporate Governance theo hướng định lượng dù khó Đề tài dùng Governance score - xu hướng gần nghiên cứu Corporate Governance Đây phương pháp tốt đề tài - Đã đầu tư nhiều để tổng hợp cách phong phú sở lý luận thực tiễn Corporate Governance, cho người đọc thông tin mẻ thú vị đề tài - Đã chứng tỏ nỗ lực lớn việc đọc viết tiếng Anh Đã tìm cách tiếp cận vấn đề mẻ áp dụng vào thị trường Việt Nam - Đã đưa nhìn gần chi tiết thực tế Corporate Governance disclosure Việt Nam để đóng góp cách thiết thực vào nhận biết nghiên cứu đề tài Việt Nam Từ đưa gợi ý cho cơng ty cho việc cải thiện mặt pháp lý cho vấn đề thị trường Việt Nam ... quality of annual reports of listed companies in Vietnam and testing the impact of corporate governance on the financial performance It uses the annual reports & financial ratios of SSI 30 Update companies. .. Region has on of the highest standards of corporate governance in Asia With a global economy, corporate governance standards must also be global Consequently, those Hong Kong companies whose governance. .. University of Singapore which has done on the Corporate Governance Disclosure in Singapore, in Malaysia, in Thailand, in Indonesia and also one in Hong Kong It uses the corporate governance disclosure