2020 Pwint Thit Sa / Transparency in Myanmar Enterprises
The sixth Pwint Thit Sa/Transparency in Myanmar Enterprises (TiME) report was published on Monday 21 December.
Twelve more companies were assessed in 2020 compared to the 2019 Pwint Thit Sa report. For the first time all banks were included in Pwint Thit Sa, to reflect the higher standard of corporate governance required of banks in Myanmar. Companies assessed included 52 public companies (of which 8 are banks), 174 privately owned companies (of which 17 are banks), 28 state-owned enterprises (of which 4 are banks) and 6 companies listed on the Yangon Stock Exchange (YSX) (of which 2 are banks).
The top three companies in 2020 scoring highest for disclosure are uab bank, City Mart Holdings Group (CMHL), and Shwe Taung Group. These companies have previously featured in the Top 10 of previous Pwint Thit Sa reports. Pwint Thit Sa 2020 found that all of them continue to improve their disclosure. Other companies scoring highly are Yoma Bank,First Myanmar Investment Public (FMI), Max Myanmar Group, Kanbawza Bank (KBZ), Myanmar Thilawa SEZ Holdings, TMH Telecom PublicandDagon Group.
In 2020, the Top 20 contains five volunteer companies (Alpha Power Engineering, Authentic Group, KMD, Maha Agriculture Microfinance, and Smart Technical Services. While average scores improved in 2020, scores for SEEs went from 3% in 2019 to 2% in 2020, which is mainly attributable to their not expanding or updating data, while being scored against a more challenging scorecard. Yangon Electricity Supply Corporation (YESC) and Myanmar Shipyards, the only two State-owned Economic Enterprises (SEEs) to score (just) above the overall average mark of 2%. Many companies amongst those assessed still do not have corporate websites (98 out of 260, or 38% of those surveyed). A full list of the companies assessed is in Annex 1 of the report.
The 2020 report continued with the methodological approach adopted in 2018 and 2019, by using the ASEAN Corporate Governance Scorecard (ACGS) which is used widely in the region to assess disclosure of corporate governance by large companies. The criteria against which companies were assessed are contained in Annex 2 of the report. As in 2018 and 2019, the criteria for 2020 were grouped in four dimensions - Corporate Profile, Corporate Governance, Sustainability Management and Reporting. However, not all ACGS criteria were used, and some additional performance criteria concerning sustainability and its relationship to the company’s business model have been added in the 2020 Pwint Thit Sa report, aligned with the Integrated Reporting Framework <IR>.
In addition, the scoring system was slightly adapted for Pwint Thit Sa 2020 to distinguish the performance and practices of companies on sustainability and reporting. Firstly, a distinction was made between types of companies. Listed and public companies with over 100 shareholders were assessed against 143 criteria. Private companies and state-owned enterprises were assessed against 113 criteria, but 30 criteria could be earned as a bonus for disclosing information that listed/public > 100 shareholder companies are required to disclose. This year, a new sliding scale (0,1,2) was used for some criteria relating to policies and sustainability to reflect how closely commitments were genuinely aligned to the business and to reward companies that embraced a more holistic and comprehensive approach to disclosure instead of a compliance-driven approach. Furthermore, additional criteria were added on governance of philanthropy, and SDGs.
Pwint Thit Sa 2020 also highlights current regulatory requirements concerning corporate governance and disclosure, as well as summarizing developments on business and human rights (including the 2019 UN Fact Finding Mission report), corruption, ESG/sustainability reporting, and corporate philanthropy and ‘CSR’. It contains recommendations for companies, government, and other stakeholders.
The companies to be assessed were informed by email and letter in February (to the extent MCRB had contact details) about the 2020 research methodology. First draft scores were shared with companies in and finalised in May 2020, with a deadline for companies to meet by the end of August 2020. All companies were provided with the same information and the same offers of dialogue and deadline extensions where requested. Over 40 companies contacted MCRB/Yever, and 32 followed up with a meeting to discuss their draft scores, with specific suggestions provided by MCRB/Yever on how to improve their disclosure.
Publication of the next Pwint Thit Sa report is planned in 2022.