KUALA LUMPUR: Many of the 50 largest publicly-listed insurance companies in Asia Pacific by market capitalisation have been found wanting in best practices in corporate governance, with transparency being the key shortcoming. The first study of corporate governance practices of Asia Pacific insurance companies across 15 countries, including Malaysia, stressed the need for improved disclosures by insurance companies, which include having good board-related assessments and succession planning. Authors – Mak Yuen Teen associate professor of National University of Singapore business school and Chris Bennett, director, BPA Australasia – in collaboration with the Iclif Leadership and Governance Centre, found that transparency, especially in the areas of compensation and risk management including roles, responsibilities and reporting relationships of the chief risk officer, were lacking. "There is considerable variation in corporate governance practices and disclosures across the countries and the difference is quite striking. Although there are some areas where many companies do quite well in, such as transparency of ownership and corporate structure, there remain many other areas (board assessments, remuneration and risk management) where companies can improve on. There also needs to be more transparency regarding major insurance companies that are not publicly listed," Mak said. Bennett said it is striking that disclosures about risk management processes, compensation and the board/director assessment processes are not generally very full, which makes it hard for regulators and investors to assess how appropriately these matters are being managed and which make it very difficult for companies to benchmark their own practices. "The industry generally would benefit from fuller disclosures. Poor corporate governance presents risks to the financial system, investors and other stakeholders, including policyholders. Insurance companies also constitute an important group of institutional investors in other companies and, therefore, how they govern themselves is extremely important." Mak and Bennett made 18 detailed recommendations including the need for companies to review board structure and practices, as well as improving audits and implementation of whistle-blowing policies. Data for the study were collected between March and May 2014 using 2013 annual reports for 30 companies and 2012 annual reports for 20 companies, supplemented by other sources such as company websites and regulatory filings. This is a follow up to an earlier study on conducted in 2013 where Mak and Bennett conducted a study of the corporate governance of 50 Asian banks.