ASSOCIATION of Southeast Asian Nation (Asean) integration should not be a blanket initiative; instead governments and practitioners need to take into account the unique characteristics and different growth levels of the countries when planning a regional capital market convergence, according to experts.

Whether it is the Asean Corporate Governance Scorecard, accounting standards or ranking standards, the experts said the integration of Asean Economic Community 2015 should have enough flexibility to accommodate the different levels of development within the region.

Securities Commission Malaysia Deputy Chief Executive Nik Ramlah Mahmood said the reality was that Asean countries were growing at different speeds.

“Corporate governance should not be pursued in itself, it must be relevant to what is on the ground, to the people and the companies,” she said at a panel session at the International Corporate Governance seminar, held in conjunction with the Organization for Economic Cooperation and Development Asian Rountable.

However, National University of Singapore associate professor of accounting Prof. Mak Yuen Teen believed a complete integration may not be viable and warned against too much compromise, which would result in a dilution of standards.

Ranjit says Malaysia has established a strong regulatory framework that underpins the country’s corporate governance eco-system.

“If you want integration, you cannot just select whatever is easy because that will not achieve much in the end,” he said. “There must be give and take and knowing what are the priorities.”

Asset management firm BlackRock head of corporate governance for Asia ex-Japan Clarence Yang recommended that instead of applying one-for-all standards, a “comply or explain” mechanism could be in place so that companies that cannot comply with the standards under certain circumstances could provide valid reasons instead.

In his opening address, SC Chairman Ranjit Ajit Singh agreed with looking at Asean as both a region and collection of differing markets.

“While there can be universal corporate governance principles and best practices which regulators can look to, we recognize that intricacies prevailing may require contextualization of the corporate governance framework to suit domestic conditions,” he said.

Ranjit said Malaysia had since the Asian financial crisis, established a strong regulatory framework that underpinned the country’s corporate governance eco-system.

He noted that most of the recommendations under the Corporate Governance Blueprint released in July 2011 had been implemented through the revised Malaysian Code on Corporate Governance and amendments to the listing requirements.

“We are currently half-way through the five-year implementation period. A midterm post implementation review will be undertaken next year to gauge the extent of effectiveness of our regulatory efforts to steer our direction forward,” he said.

The roundtable was organized in partnership with the Japanese government. –MCT