Electronic Media And Corporate Governance – Thailand’s First Small Steps

One of the difficulties facing foreign investors in Thailand has been the requirement that shareholders (or their proxies) and directors be physically present at meetings for purposes of passing resolutions.  Circular resolutions, whereby the directors or shareholders pass a resolution in writing without holding an actual meeting, will not be accepted for filing with the Department of Business Development (DBD),  which has requested companies to remove any articles from their articles of association permitting circular resolutions.

In a move to provide some flexibility to this physical presence requirement, the National Council for Peace and Order (NCPO) issued an announcement in 2014 (no. 74/2557) permitting the use of “electronic media” (in essence, participation by way of telephone conferencing, videoconferencing or web conferencing) for purposes of holding shareholder and director meetings.  Although this has been seen as a step in the right direction, the attendant conditions for using such electronic media make it of questionable value for Thailand based companies.  In particular,

  1. One third of the quorum for such a meeting have to physically attend the meeting in person at a single venue in Thailand.
  2. People participating via electronic media have to be in Thailand.
  3. Written minutes of the meeting must be prepared.
  4. The meeting has to comply with security measures as prescribed in the Notification of the Ministry of Communication and Information Technology re: Security Policy and Standards of the Meeting via Electronic Media B.E. 2557 (2014), which include that
    • the entire meeting be voice recorded or videotaped;
    • measures to prevent tampering with such meeting record be adopted; and
    • the computer data transmissions from the meeting be recorded

In late 2016, the DBD passed regulation 13/2559 to outline the scope of the 2014 NCPO announcement as it applies to corporate meetings as well as the paperwork requirements for meetings held by electronic media.