The Monetary Authority of Singapore (MAS) has accepted all the recommendations by the Corporate Governance Council and issued the revised Code of Corporate Governance which clarifies how companies should adopt the comply-or-explain regime. The revised code is intended to ensure companies provide meaningful disclosures to their stakeholders. In line with the council’s recommendations, the Singapore Exchange listing rules have also been amended. Key changes to the code include encouraging board renewal, strengthening director independence and enhancing board diversity to reinforce board competencies. Code revisions were also made on disclosures of the relationship between remuneration and value creation, and consideration of the interests of groups other than shareholders to encourage better engagement between companies and all stakeholders. Two changes stand out in particular. The appointment of Independent Directors or IDs beyond nine years will now be subject to a two-tier vote by all shareholders, excluding directors, CEO and associates. If the ID is not voted in, the person can continue to serve on the board as a non-independent director. The other is a more stringent definition of the independence of an ID by lowering his shareholding threshold to 5% from 10%. The revised code will take effect for annual reports covering financial years starting January 2019. However, a longer transition period of three years will be provided for changes in the SGX listing rules relating to board composition, to provide companies with more time to make board composition changes.

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The Edge Singapore