Hong Kong kicks Singapore to 2nd place in Corporate Governance survey

For the first time since 2007.

Corporate governance in Singapore deteriorated in the past two years amid slowing reforms on the subject, dipping below the perceived strength of Hong Kong for the first time since 2007, according to a survey.
A report by Bloomberg shows that Hong Kong scored the highest in Asia Pacific this year with 65, followed by Singapore’s 64, though both were tied for first in the rankings because of the minimal difference in the results. The numbers were crunched by a joint report by CLSA Ltd. and the Asian Corporate Governance Association. Japan passed Thailand for third, while the Philippines and Indonesia ranked last.

Bloomberg adds that the CG Watch report is among the most the extensive studies into the field of corporate governance in a region that’s littered with family-run conglomerates and often lags behind the U.S. in the transparency of financial disclosures. This year, companies from Hyundai Motor Co. to Maruti Suzuki India Ltd. have triggered governance concerns that led to declines in their shares.

Here’s more from Bloomberg:

While both Hong Kong and Singapore saw declines from the last report in 2012, the former scored higher for its disclosure of price-sensitive information and compensation of senior officials, as well as the strength of its legal framework governing insider trading and market manipulation, according to the report. Singapore got credit for disclosure of audited annual statements within 60 days, mandatory quarterly reporting and statutory removal of directors for fraud.

China ranked ninth -- the Philippines and Indonesia were tied at No. 10 -- and scored the same as in 2012 amid continuing concerns over the speed and quality of financial disclosures, according to the report.

CLSA said in a study of 944 companies in the region, corporate governance scores slipped from 2012, with the biggest decline coming from Korea because of the rise in intergroup transactions and poorer disclosure.