ASEAN Corporate Governance Scorecard (ACGS) is a Corporate Governance parameter developed as an initiative of the ASEAN Capital Markets Forum (ACMF), aimed to improving corporate governance standards and practices in the ASEAN region. The ACGS currently in use is largely based on sources derived from the Corporate Governance Principles of the Organization for Economic Co-operation and Development (OECD) and the Indonesia Corporate Governance Network (ICGN).
Since Indonesia was appointed as one of the OECD’s key partners in 2007, the adoption of ACGS parameters by companies in Indonesia, especially those listed on the Indonesia Stock Exchange (IDX), has shown significant progress, as evidenced by several companies achieving high scores and receiving recognition for their GCG practices.
However, based on the comparative analysis in the graph above, the GCG practice in Indonesia still show relatively lower scores in (2015, 2016, 2019 and 2021) compared to other ASEAN countries such as Singapore, Malaysia, the Philippines and Thailand. ACGS has played a significant role in encouraging listed companies in the ASEAN region to adopt better governance practices, increase transparency, and attract international investors over time.
Since their introduction in 2008, the ACGS parameters have undergone several adjustments. These adjustments were made to ensure their relevance and alignment with changes in regulations and corporate governance practices at both the regional and global levels.
The number of ACGSThe number of ACGS questions or sub-parameters in 2008 was 114, derived 5 parameters (i. Rights of shareholders, ii. Equitable treatment of shareholders, iii. Role of stakeholders, iv. Disclosure and transparency and v. Responsibility of the board). In 2011, this number increased to 233 questions/sub-parameters. In 2017, it was adjusted to 184 questions/sub-parameters, and finally, in October 2023, ACGS was revised to 4 parameters (i. Rights and equitable treatment of shareholders, ii. Sustainability and resilience, iii. Disclosure and transparency and iv. Responsibility of the board) with 193 questions/sub-parameters.
The adjustment of ACGS based on the G20/OECD Principles of Corporate Governance 2023 (Revised October 2023 – Version 2 March 2024), includes strengthening ESG (Environmental, Social, and Governance) disclosure, sustainability and resilience. Several ASEAN member countries have integrated Governance, Environmental and Social (ESG) parameters to assess the extent to which companies adopt sustainability practices. This focus aims to support global initiatives in mitigating climate change and promoting social responsibility. These updates ensure that ACGS remains relevant to regional and global dynamics in corporate governance practice.
Conclusion
The adjustment of ACGS from 2008 to 2023 represents a positive development in the practice of transparency among public companies in the implementation of Good Corporate Governance(GCG). The ACGS can serve as a key benchmark for any company using it to improve their corporate governance practices at the international level. PT Nusantara Bisnis Konsultan Indonesia (NBK) is here to provide valuable insights and perspectives on information transparency, particularly in GCG Practices, and to help build the excellent reputation.
Author:
Yudho Prabowo