The Fourth Pwint Thit Sa Report on Transparency in Myanmar Enterprises was published on March 26, 2018 by Myanmar Centre for Responsible Business (MCRB) in partnership for the frst time with Yever, a Myanmar Business consultancy. The objective of the Pwint Thit Sa report is to provide an incentive for improving corporate governance and other corporate information by Myanmar companies through publicly recognizing them for their disclosure and transparency. MCRB conducted and published 2014 report for the frst time in July 2014 and yearly subsequent reports were published in 2015 and 2016.
The top three companies in 2018 scoring highest for disclosure are First Myanmar Investment (FMI) Group, City Mart Holdings (CMHL), and Serge Pun & Associates (SPA). While these companies have consistently featured in the Top 10 of previous Pwint Thit Sa reports, all of them have made significant efforts in Pwint Thit Sa Report 2018 to enhance disclosure. The Fourth Pwint Thit Sa Report 2018 access information disclosure on the corporate websites of 182 large Myanmar companies, including listed and public ones.
Although the 2018 report was based on the same principle of rating online information disclosure by companies, it adopts a different scorecard from the previous reports. The scoring methodology uses the most relevant criteria from the ASEAN Corporate Governance Scorecard which is also used in Malaysia, Thailand, Philippines, Indonesia and Singapore. This change to using ASEAN Corporate Governance Scorecard was made to reflect the developments in Myanmar and the region.
Five dimensions were assessed using total 74 criteria including a 15 Pwint Thit Sa extra criteria; Corporate Governance (68%), Corporate Culture (9%), Reporting (9%), Sustainability Management (7%) and Communication (7%). The report adopts a recognized reporting framework such as the Global Reporting initiative or the Integrated Reporting Framework.
Issues covered in Pwint Thit Sa 2018 Scoring are Corporate Governance ( Board of Directors, Audit Committee, Nominating Committee, Remuneration Committee, Risk Management, Performance Review and Board Appointments, Corporate Policies, Business Ethics, Whistleblowing ), Corporate Culture ( Company profle ), Sustainability Management ( Management, Strategy, Reporting ) , R e p o r t i n g ( N o n – f i n a n c i a l ) and Communication ( Corporate Communication ). Four types of company included in the report are public company, publicly listed company, private company and company with little or no websites.
Top ten companies assessed in Pwint Thit Sa 2018 report with the disclosure of information, compared to the ranks in the 2016 report are First Myanmar Investment (1), City Mart Holding Co., Ltd (8), Serge Pun & Associates (2), AYA Bank (6), Max Myanmar Group (3), Shwe Taung Group (11), Dagon Group (10), Grand Guardian Insurance, Myanmar Thilawa SEZ Holdings (18) and KBZ Group (7). According to the report, they all made signifcant efforts in information disclosure to improve their rankings in the 2018 report in comparison with the 2016 report. Grand Guardian Insurance, a newcomer to the list, was ranked equal seventh with Dagon Group. The strongest area among top ten companies is Corporate Culture, with an average score of 91% for the top ten and the weakest area is Sustainability Management with an average score of 46% for the top ten.
Among 182 companies assessed, First Myanmar Investment consistently rank frst place in 2016 report and also in 2018 report. Some companies such as Myanmar Thilawa SEZ Holdings, Myanmar Awba, First Private Bank and Yuzana Group can be recognized as development companies in corporate transparency comparing their ranks in 2016 report.
On the other hand, Smart Technical Services, MPRL E&P Group and Parami Energy Group are among the former top ten companies in 2016 report. However, they have resulted decline in scores in the 2018 report: Smart Technical Services drop from rank 4 to rank 15, MPRL E&P Group from 5 to 16 and Parami Energy Group from 9 to 14. Furthermore, ranking positions of Htoo Group, Myanmar Consolidated Media Holdings, Capital Diamond Star and UMG Group have significantly decreased in corporate transparency and information disclosure.
Some public and private companies such as Ayeyarwaddy Farmers Development Bank, Annawar Tun, Aung Chantha Trading, Danya Gon Yee Development and Farmers Development Public Bank have not yet established corporate websites (67 out of 182). Even when these companies have websites, most of them publish limited company information relating to the criteria in the report.
Vicky Bowman, Director of Myanmar Centre for Responsible Business, and an Interim Board member of the newly launched Myanmar Institute of Directors said, “This year’s Pwint Thit Sa report is a step change, with more companies, more wide ranging criteria, and based for the first time on the ASEAN Corporate Governance Scorecard. Yet much is familiar: the leading companies from last year are still more or less the same as before. FMI should be congratulated for coming top for the third year running and demonstrating a high standard of corporate governance. And companies like CMHL, Shwe Taung and AYA Bank should be recognized for their signifcant improvement.”
“One Striking statistic from this year’s report is that the average score for a company in which the World Bank’s International Finance Corporation invests is 54%, compared to an average of companies assessed of 7%. This is even greater transparency than the fve listed companies on Yangon Stock Exchange, which averaged 38%. This demonstrates that good corporate governance is what attracts investors and partners for companies, It also shows that IFC investment and the guidance that accompanies it, make a real difference to how these companies run themselves.”
N i c o l a s D e l a n g e o f B u s i n e s s Sustainability consultancy Yever, MCRB’s partner for the report remarked, “The enthusiasm with which some companies took up our offer of feedback, and the dramatic improvement in their scores that resulted, clearly demonstrates that some companies are keen to receive guidance on what good corporate governance and disclosure means. The Securities and Exchange Commission of Myanmar is well-placed to do this, and to set corporate governance in Myanmar off on the right track. But it needs to have suffcient resources and support from development partners to do so.” “What is also good to see is that there is innovation and global best practice on the part of some of the leading companies when it comes to sustainability management and reporting, This takes us away from the donations culture towards a future in which sustainability and inclusion are embedded in the business’ core activity.” Another finding was the companies that are registered at DICA as ‘public’ companies have very poor record and absence of corporate governance, they have not met the reporting and disclosure requirements for such companies.