because basel ii ’ s advanced approaches are derived from the best banking practice. it is, therefore, a vehicle for better risk management. banks in emerging markets, including here in thailand, should, therefore, take advantage of this opportunity to improve their operations. from the perspective of financial information, it is also necessary for banks to produce good quality financial statements so that stakeholders will be well - informed, and a sound judgment on their financial status can be made by the market. good quality financial statements typically contain comparable and reliable information, which depends in turn on the accounting standards being used. in this respect, ifrs can help ensure that financial reporting is prepared under accepted principles that convey a true and fair view of the financial position. for the banking sector, the most important accounting standard is the ias 39 because it deals specifically with financial instruments. the standard assures that financial instruments are correctly recognized and measured in the financial statements, to reflect the true financial position and performance, as well as the related risk exposure. under ias 39, there is important change to the accounting for derivative transactions, in which banks need to markto - market and record all derivatives on their balance sheets, as well as classify them as held for trading, unless they are used as hedging instruments. previously, all derivative transactions are kept off the balance sheet, and hence from the recognition of external stakeholders or even bank management. ias 39, therefore, brings off - balance sheet items into the spotlight. apart from ias 39, commercial banks also need to comply with the accounting standards concerning financial instrument ’ s presentation ( ias 32 ) and disclosure ( ifrs 7 ), which require banks to present their financial statements in an appropriate format, and to disclose information sufficiently regarding financial instruments and risk. ladies and gentlemen, the bank of thailand has taken a careful timing to implement both standards in thailand. similar to many economies in the region, commercial banks in thailand will start maintaining capital according to basel ii by the end of next year, and by the end of 2009 for banks with the advanced approach. ias 39, on the other hand, will be fully enforced by the federation of accounting professions in the beginning of 2010. however, the bank of thailand has already adopted some parts of ias 39, namely the impairment of assets since december last year, and we are now considering adjusting the related regulations to be in line with the concept of ias 39. for basel ii, preparations on the supervision side started a number

leaderships are being challenged. board members and executives are faced with strategic risks that could threaten viability of their organizations if they do not make timely changes to their business models to remain relevant and competitive. equally important is how to manage risks associated with this digital transformation. as all directors know well, executing successful strategic transformation is not an easy task. executing successful digital transformation when the ecosystem is still evolving will be even more challenging. ladies and gentlemen, amidst these rapid technological advancements, i believe everyone here agrees that a wait - and - see strategy is inadequate. hence, i very much concur with the conference ’ s theme of “ a call for action. ” it takes courage to lead a transformative journey into an unknown territory. the collective wisdom shared among directors here will enable all of us to make better informed decisions and lead our organizations, and more importantly, lead thailand, onto the right path – the path which will rise above disruptions, as the iod has eloquently put it. as thailand embarks on the journey for digital transformation, we must focus on three key imperatives of productivity, immunity, and inclusivity. technological advancement provides tremendous opportunity for us to uplift these three areas like never before. while policymakers and regulators can provide support at the infrastructure level and promote a stable environment conducive for innovation, it is at the firm level that actions can be and must be taken to drive meaningful changes for the country as a whole. first, on productivity : uplifting the country ’ s productivity is necessary to ensure continued long - term economic growth. specifically, structural changes due to an aging workforce have hastened the need for our country to improve productivity just to maintain output level. in fact, thailand ’ s labor productivity growth has been on a decline. from 2002 to 2017, our annual growth of labor productivity averaged 2. 9 percent, a significant drop from an average of 5 percent during 1986 to 2001. in contrast, countries such as china and indonesia have been experiencing rises in productivity growth. should this trend continue, thailand will not be able to maintain its competitiveness and output level. fortunately, many technological advancements available at much lower costs today hold huge promises for raising productivity. cloud computing, robotics and automation have allowed businesses to save significant costs. big data, artificial intelligence and machine learning capabilities can now offer insights that enable more targeted services. i urge you all to seize this opportunity and leverage on new technologies to improve the productivity of your