Southeast Asia’s venture capital associations have released guidelines to set regional governance benchmarks for startups as they begin to address rising concerns of poor professionalism in the tech industry.
The collaboration of leading private capital groups from Singapore, Indonesia, Thailand, Vietnam, and Malaysia has resulted in the launch of a document titled “Maturation Map: Corporate Governance in Southeast Asia Private Markets.”
“This foundational document sets a shared benchmark for startup governance, aiming to future-proof the region’s innovation economy and build the trust for long-term capital formation and public market readiness,” the associations wrote in a statement released on April 24.
Singapore Venture and Private Capital Association (SVCA) vice chairman Shane Chesson, noted that Southeast Asia’s private investment landscape is “still young and learning.”
“The ‘Maturation Map’ … is a sign of the collective will and approach we can take to improving governance for better investment returns,” he said.
The SVCA is set to summarize the document into an industrywide playbook for discussion with startup founders and board members.
The document will act as a guide and also reflect the collective voice of venture and growth investors, founders, board members, regulators, advisers, and legal experts.
“It is designed to strengthen governance from pre-revenue startups to IPO-ready companies—supporting sustainable innovation, scaling, and successful exits,” the statement said.
Regional investment firms, legal experts, and governance advisers were involved in designing the guidelines. “The result is a comprehensive, practical framework aimed at reducing governance failures, encouraging active diligence, and preparing high-potential startups for successful exits via IPO or merger and acquisition,” according to the statement.
The associations acknowledged they were partly motivated by high-profile governance breaches, including financial mismanagement and fraud in Singapore, Indonesia, Vietnam, and the Philippines. “These incidents have highlighted the urgent need for proactive, stakeholder-led governance practices, especially in private markets where regulatory oversight is limited.”
In Indonesia, aquaculture technology company eFishery was recently accused of financial fraud. Preliminary findings from a forensic audit revealed that eFishery’s founders and top executives had inflated the startup’s revenue nearly fivefold between January and September 2023 and manipulated earnings figures to make it appear profitable despite incurring massive losses.
Other findings include alleged mismanagement and financial embezzlement at edtech startup Skola in Vietnam and Philippine-based fintech firm PayMongo. Local police are investigating both cases.
The guidelines set out proposed action for active due diligence, emphasizing that investment practices should be continually reviewed and improved. “This ensures that companies meet increasingly stringent criteria as they mature and are better positioned to navigate future challenges,” the document noted.
The guidelines also encourage artificial intelligence-driven governance solutions to detect financial anomalies, automate reporting, and improve real-time oversight. “This technological integration can enhance accuracy and timeliness in monitoring corporate activities and raise [the] difficulty of executing fraudulent acts,” the document stated.
In its final section, the guidelines recommend enhancing the adviser ecosystem, along with stronger governance frameworks for supervision and enforcement. “Prioritizing enforcement of shareholders’ rights and exploring legal avenues to address breaches … underscore the importance of accountability and deterrence.”
The association refers to the guidelines as a living document, which will be updated regularly based on feedback, changing market conditions, and ongoing dialogue.
“The ‘Maturation Map’ helps set that direction for Southeast Asia, and we support the call for stronger follow-up measures like regular audits, board training, and ESG tracking to raise the bar together,” said Ng Sai Kit, the chairman of the Malaysian Venture Capital & Private Equity Association (MVCA).
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.