SINGAPORE — The Monetary Authority of Singapore (MAS) has formed a corporate governance council to review the code of corporate governance. The council will look at improving the quality of companies’ disclosure of their corporate governance practices and explanations for deviations from the corporate governance code, as well as propose mechanisms to monitor the progress made by listed companies in strengthening their corporate governance practices.
The last review of the corporate governance code was in 2012, when changes were introduced to strengthen board independence and enhance remuneration practices and disclosures.
Last year, postal and logistics services provider Singapore Post came under scrutiny when it emerged that then board member Keith Tay was a shareholder and chairman of the financial adviser to three freight forwarders the postal-services provider bought in 2013, 2014 and 2015.
Mr Tay subsequently resigned from his post as SingPost’s lead independent director following the release of a special audit report, amid a leadership crisis at SingPost which saw the resignation of the chief executive officer and the chief operating officer, among others.
Mr Chew Choon Seng, former chairman of the Singapore Exchange, will chair the corporate governance council whose members are drawn from various stakeholder groups. They include Mr Willie Cheng, chairman of the Singapore Institute of Directors; Mr Hsieh Fu Hua, chairman of United Overseas Bank; Ms Leong Wai Leng, chief financial officer of Temasek Holdings; Mr Douglas Foo, chairman of Sakae Sushi, and Mr Mak Yuen Teen, associate professor of accounting at National University of Singapore.
Representatives from the MAS, the Accounting and Corporate Regulatory Authority and Singapore Exchange will also be appointed to the council.
Said Mr Chew: “With market participants paying greater attention to the corporate governance practices of listed companies, companies are now under increasing pressure to become more transparent and accountable to their stakeholders. It is important for our listed companies to go beyond mere box-ticking and boiler-plate explanations.
“They must be able to engage meaningfully with their stakeholders and implement (corporate governance) practices that lead to long-term sustainable business performance.”
The council will consult the public on its recommendations, including changes to the corporate governance code, before finalising them.
The Financial Reporting Council (FRC) has announced plans for a fundamental review of the UK Corporate Governance Code.
This will take account of work done by the FRC on corporate culture and succession planning, and the issues raised in the Government’s Green Paper and the BEIS Select Committee inquiry.
The review will build on the Codes globally recognised strengths developed over the past 25 years while considering the appropriate balance between its principles and provisions and the growing demands on the corporate governance framework
To guide this review, the FRC will seek input from a wide range of stakeholders including its recently established Stakeholder Advisory Panel of high profile representatives from a wide variety of sectors.
In its response to the Government’s Green Paper on Corporate Governance Reform the FRC will highlight the importance of helping boards take better account of stakeholder views, linking executive remuneration with performance, and extending the FRC’s enforcement powers to ensure that disciplinary action can be taken against all directors where there have been financial reporting breaches.
Any changes to the regulatory frameworks and to the Code will be done carefully and through full consultation with a wide range of stakeholders.
The FRC will start a consultation on its proposals later in 2017, based on the outcome of the review and the Government’s response to its Green Paper.