Asia Disclosure Index 2019
How Asia’s Leading Listed Companies Fare on Voluntary Disclosure
Corporate disclosure practices are a proxy for management culture and behaviour. It reveals the ‘tone from the top’ by the board and management team. Public companies are being scrutinised for non-financial information by stakeholders, and institutional investors are looking at board and leadership quality to make investment decisions.
FTI Consulting’s view is that disclosure standards should be set at the board level and reviewed regularly to ensure that they are benchmarked globally as competition for institutional investment funds is global. In fast-growth economies and regions, voluntary embrace of higher standards of corporate disclosure by listed companies, by breaking away from local norms, is a good way of commanding a ‘transparency premium’ from global investors.
FTI Consulting has been reviewing corporate disclosure practices, specifically voluntary disclosure, in Asia over the past five years (specifically in India and the ASEAN region), and this year, the research has been expanded to include the Hong Kong listing jurisdiction. The Asia Disclosure Index 2019 is a composite research property that benchmarks non-financial voluntary disclosure (as made publicly through company annual reports and websites), keeping with the direction of disclosure regulations in other jurisdictions, including the 2014 EU Non- Financial Reporting Directive on non-financial disclosure, and global institutional investor expectations.
The Asia Disclosure Index 2019 report reviews non-financial, voluntary disclosures and creates comparable benchmarks, with an eye on anticipated disclosure regulations. It is a non-commercial, public research initiative that seeks to quantify and frame the ever-rising standards for voluntary disclosure. The report splits twelve voluntary disclosure parameters into three categories (see Research Methodology on page 11) and sets parameters that reveal non-financial information about performance (Performance Disclosure), board quality (Board Quality/ BQ) and risk management (Risk Disclosure/ RD). The report then assigns weights to create a Composite Voluntary Disclosure (VD) score, that has been applied to the top 330 listed Asia companies across eight listing jurisdictions. The report makes comparisons, where appropriate, between the scores for ASEAN, Hong Kong and Indian companies.