What the CGR rating means and why we require 3 stars or above
One of our universe criteria is a CGR rating of 3 stars or above. Here's what that means and how it works.
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If you’ve been following our reports on Settrade, you’ll have noticed something: every single company in our Uncovered Thai Stocks universe carries a CGR rating of at least 3 stars.
The CGR is an annual corporate governance assessment running for 25 years
The Corporate Governance Report of Thai Listed Companies (CGR) is an annual assessment conducted by the Thai Institute of Directors Association (IOD) with support from the Stock Exchange of Thailand (SET).
The CGR evaluates listed companies against criteria drawn from the OECD Principles of Corporate Governance and Thailand’s CG Code. In the most recent 2025 assessment, 844 listed companies were evaluated across 173 criteria.
For investors, this matters because it gives you a standardized, independently assessed measure of how well a company is governed. Companies are rated from 1 to 5 stars based on their score.
The assessment produces a percentage score, which gets translated into a star rating:
The assessment categories have evolved over time
No standardized scoring system is perfect, so it must continually evolve to remain relevant and accurate. As part of the 2023 renewal, the IOD restructured the framework into four categories.
1. Rights of Shareholders and Equitable Treatment of All Shareholders.
2. Consideration of Stakeholders’ Roles and Sustainable Business Development.
3. Disclosure of Information and Transparency.
4. Responsibilities of the Board of Directors.
The IOD has not publicly disclosed the specific weightings for the new four-category structure, but within each category, they use a combination of regular, bonus, and penalty questions to arrive at a percentage score.
It’s good not to share the entire methodology publicly, as it could lead companies to try to “game the system.”
The IOD expanded disclosure to all rating levels in 2025
Historically, the IOD only published the names of companies rated 3 stars (”Good”) or higher. If you scored below that, your result stayed private.
Starting from 2025, the IOD announced that results will be disclosed for all six groups. Every company gets a public rating, whether it’s 5 stars or no logo. This is a meaningful shift toward transparency, and it should give investors better visibility into the governance landscape.
We use the CGR as a governance risk filter
At Uncovered Thai Stocks, we require a CGR rating of 3 stars or above for inclusion in our universe of approximately 250 stocks. It establishes a minimum standard. A 3-star company, scoring 70–79%, isn’t perfect; it has meaningful room for improvement. But it has passed a baseline check on shareholder protections, transparency, and board oversight.
In the uncovered stock space, where many companies are small or mid-sized, with concentrated ownership, limited board independence, or less-established disclosure practices, that baseline matters. The CGR filter hopefully helps us avoid the worst cases.
CGR ratings can change, and that’s worth watching
CGR ratings aren’t static. Companies improve or deteriorate from one year to the next, and those moves tell you something.
For example, Roctec Global (ROCTEC) is currently in our Top 50. ROCTEC jumped from a 3-star rating to a 5-star rating within a single year. We don’t use governance improvement as a factor in our quantitative model, but it’s a positive signal, a company investing in better practices.
The flip side is equally important: a company that drops below 3 stars exits our universe entirely, regardless of how strong its financial metrics look.
The CGR filter helps us focus on the right starting set
Let’s be direct about what the CGR filter does and doesn’t do.
It doesn’t replace fundamental analysis. It doesn’t mean that every 5-star company is a great investment or that every 3-star company is risky.
But it should keep us away from companies where governance risk could destroy value.
The dream outcome of Uncovered Thai Stocks is to find hidden gems in the Thai stock market that could multiply in value. The CGR filter helps us make sure we’re starting in the right place.