Companies in Malaysia and Thailand lead for disclosure on ASEAN index

01 October 2018 Consultancy.asia

Publically listed companies in Malaysia and Thailand are leading their ASEAN counterparts when it comes to voluntary disclosure, topping the table ahead of Singapore on FTI Consulting’s ASEAN Disclosure Index for 2018 – with Indonesian, Filipino and Vietnamese companies lagging behind.

Looking beyond the legally mandatory disclosure obligations of publically listed companies operating in the ASEAN-6 – that is, ASEAN’s six largest economies; Thailand, Indonesia, Philippines, Malaysia, Singapore and Vietnam – the FTI Consulting analysis instead considers non-financial voluntary disclosure practices which align with regulations in other markets and investor expectations, such as with benchmarks in the EU.

The FTI study reviewed publically available information from the annual reporting of 180 regionally listed companies, together with an examination of corporate websites, to assess performance in 15 disclosure parameters – broken down into the categories of Performance Disclosure, Board Quality, and Quality of Risk Disclosure – before arriving at a weighted overall aggregate score to compile a final index.

Topping the chart this year were the firms of Malaysia, with a composite score 8.7 out of 10, followed by those in Thailand with a score of 8.6 and a composite 8.3 ranking among the Singaporean companies assessed. At the other end of the chart were Vietnamese companies, dragging the overall ASEAN average (7.8) down with a 5.2 rating, while companies in Indonesia and the Philippines faired in the middle with respective scores of 7.9 and 7.8 out of ten.Company disclosure performance in ASEAN countriesAs a further breakdown, companies in Malaysia received the highest score of assessed nations for board quality – 3.5 compared to a low of 2.5 in Vietnam – yet trailed those of Thailand when it came to risk disclosure, with a score of 4.2 against 4.5 in Thailand. Vietnam meanwhile, managed a composite of just 1.9 for risk disclosure, a category which included risk management related parameters such as whistleblowing mechanisms and sustainability reports.

The five parameters of risk management were all given a 10 percent weighting, indicating a transparent corporate culture, while the five of ‘board quality’, such as third party evaluations, gender diversity policy and targets, and executive remuneration details, received a lesser weighting of 8 percent each. Two further disclosure elements were evaluated together making up the remaining 10 percent; relevant operating metrics, and business strategy and long-term corporate objectives.

“The high disclosure performance of Malaysia and Thailand is commendable – with Malaysian companies clearly driving higher standards of board-related disclosures amongst other jurisdictions, while Thai companies score highest on Risk Disclosure,” the FTI index report stated in summary. Singapore, Malaysia and Thailand score highly on disclosure parameters as compared to Indonesia and Philippines, which are close to one another.”

The outlier of the assessment, companies in Vietnam, came in for a less flattering review – yet this may not entirely be a factor of poor culture; “Vietnam is still a frontier jurisdiction and this also reflects in the scores. One way Vietnam could improve would be to simply make English language versions, in addition to Vietnamese versions, of disclosures available on corporate websites.” While Vietnam was also rated as middling for gender diversity at board level, a broader BCG study previously concluded Vietnam to be a regional leader in this respect.Disclosure performance index by sector in ASEANWhen considered by industry, regardless of country origin, the telecom and tech sector led the way overall with a score of 9.4 out of 10, including a 4.9 out of 5 rating for board quality, followed by Energy/Utilities with an 8.8 – considered by the FTI analysts to be a revelation. Also surprising to the firm was the banking and financial services sector placing in fourth (split by healthcare and pharma) with a rating 7.7 despite its strong international profile. The real estate and construction sector may be a less surprising last place-getter for many.

“The ASEAN Disclosure Index report shows that progress is being made in the region to raise corporate transparency and non-financial disclosure, but there is still room for improvement,” Paul Downie, FTI’s Strategic Communications practice Chairman for the Asia Pacific said. “These are increasingly important issues, bolstered further by the EU non-financial guidelines announced last year, and we are pleased to produce a report that will help improve the financial communications ecosystem in Asia.”

South Korea the global 5G leader on Arthur D. Little maturity index

29 March 2019 Consultancy.asia

South Korea has been identified as the clear global leader in the deployment of 5G in an analysis conducted by management consultancy Arthur D. Little.

“5G will soon become widely available – and first movers have a significant lead.” So begins Arthur D. Little’s Global 5G Leadership Index report, with South Korea not just identified as a first mover, but a clear runaway leader – ahead of other strong performers the US, Australia and Qatar. From a regional perspective, the Asia Pacific was also considered the most advanced.

Benchmarking more than 40 countries across the globe, the analysis considered the maturity of each country’s 5G deployment against two dimensions – the development of infrastructure and levels of commercialisation – with South Korea leading in both, its 5G spectrum already allocated and its large mobile operators having since rolled out their networks across considerable areas.

South Korea was in a group of only eight 5G ‘leaders’ worldwide, joined by Switzerland, Finland, Spain and the UAE together with the US, Australia and Qatar, while Japan and Singapore lead the ‘followers’ group – with both countries assessed as very advanced in terms of technology adoption, 5G trials and infrastructure availability, but hampered by their lack of 5G spectrum allocation.South Korea the global 5G leader on Arthur D. Little maturity index“All leading countries have in common that they have already allocated 5G spectrum,” state the authors of the report. “These countries have enabled operators to roll out 5G networks quickly, many commercially, in 2018, and to trial use cases successfully. Markets with high-performance backhaul infrastructure rate higher, as this capability allows them to roll out 5G faster.”

“Additionally, the leading markets demonstrate high willingness to adopt new services supported by high 4G usage and fiber take-up, as well as several competitors to foster fast 5G roll-out. Overall, they do not face any major limitations, be these in terms of infrastructure, regulation, market demand for 5G applications, economic strength, or competitive dynamics.”

Elsewhere in Asia, China and Hong Kong were also among the ‘followers’ – respectively scoring a 6.4 and 6.1 rating on the index (compared to 8.8 out of 10 for South Korea), while the Philippines was assessed as a ‘5G laggard’, ranking last overall of the 43 countries analysed with a rating of just 3.4. Other table dwellers included Greece, Cyprus, Croatia and Bulgaria.

“5G is the first mobile network generation which promises the data throughput, latency, and flexibility to enable the next level of digitisation across consumer types,” said Karim Taga, Arthur D. Little’s global Telecommunications, Information Technology, Media & Electronics (TIME) practice leader. “Future business competitiveness will rely on 5G networks, making their fast deployment essential.”

5G skeptics

Meanwhile, the global leader of Accenture’s network practice, George Nazi, has been moved to respond to the lingering skepticism from the business community toward 5G network technology – with a survey of 1,800 executives finding that more than half thought it would be of little advantage over 4G. “The reality is that 5G will bring a major wave of connectivity that opens new dimensions for innovation and commercial and economic development,” Nazi said.

Nazi pointed to breakthroughs in three-dimensional video, smart-city infrastructure, autonomous cars and immersive television as examples which will unleash transformative opportunities that are still difficult to imagine today, noting that if companies fail to plan for 5G now they could well miss out on such opportunities. "Telecommunications companies will play a pivotal role in bringing these prospects to light."