Corporate Governance Scores and Roles of Determinants in Firm Values of the Companies Listed in Thailand

Abstract

This research’s objectives were to survey and compare corporate governance scores
with firm values of companies by using the 2015 companies listed database, which included
the data of 635 companies between 2013 and 2015. Based on their complete data and a good
corporate governance score as assessed by the Thai Institute of Directors Association’s
survey, 399 companies were selected as a sample group. The analyses included descriptive
statistics and hypothesis testing. With regard to descriptive statistics, the findings revealed that
overall, the listed companies that received a good corporate governance score belonged to the
Property and Construction Group while the Technology Group and the Financial Group
received a lower score, respectively. However, according to the SET50 Index Group category,
the Resources Group was found to receive the highest corporate governance score while the
Property and Construction Group and the Technology Group received a lower score,
respectively. In addition, according to the SET100 Index Group category, the companies that
received the best corporate governance score belonged to the Property and Construction
Group, Services Group and Technology Group, respectively. To study the relation between
corporate governance scores and firm values through controlled variables determinants, a
hypothesis test was launched and an analysis was made according to simple linear regression.
A finding revealed that corporate governance scores could 11.30% describe firm values at the
95% confidence level with statistical significance. Another finding revealed that authorized
capital was found to play a greater role in firm values than the number of major shareholders
and independent directors. Moreover, by using Chi-Square, another test was launched to find
out whether or not differences between and among the SET50 and SET100 Index Groups had
any influences on corporate governance score and firm values. The finding pointed out that no
differences were found to influence corporate governance scores and firm values. However,
the listed companies in the Consumer Products Group and Market for Alternative Investment
Group (MAI) were excluded from the test because no companies in the groups have been
classified into the SET50 and SET100 Index Groups.
Keywords: Corporate Governance Scores, Firm Values, Companies Listed