Singapore Corporate Governance

Provision 4.3 says “The company discloses the process for the selection, appointment and re- appointment of directors to the Board, including the criteria used to identify and evaluate potential new directors and channels used in searching for appropriate candidates in the company’s annual report.” How does Comfort Delgro's disclose its Director processes? In what ways is showcasing a  fairly...

Provision 4.4 is yet another bumper clause, “The NC determines annually, and as and when circumstances require, if a director is independent, having regard to the circumstances set forth in Provision 2.1. Directors disclose their relationships with the company, its related corporations, its substantial shareholders or its officers, if any, which may affect their independence, to the Board. If the...

Provision 4.5 states   “The NC ensures that new directors are aware of their duties and obligations. The NC also decides if a director is able to and has been adequately carrying out his or her duties as a director of the company. The company discloses in its annual report the listed company directorships and principal commitments of each director, and where a director holds a significant number o...

Principle 2 writes that “ The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company. ” This gives a hint that independence can be shown up by the decisions made - is it in the best interests of the company? However, what exactly is the "best interest" of the company? Sh...

Provision 2.1 is commonly referenced, it says “An "independent" director is one who is independent in conduct, character and judgement, and has no relationship with the company, its related corporations, its substantial shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director's independent business judgement in the...

Why is the title of an Independent Director so important? Provision 2.2. gives the answer by saying “Independent directors make up a majority of the Board where the Chairman is not independent” However, what  proportion of the Board would need to be Independent Directors if the Chairman is actually independent? Show Notes 1) Download the Singapore Code of Corporate Governance below https://www.mas...

Provision 2.3. requires that “Non-executive directors make up a majority of the Board” However, there is a common confusion between Non-Executive Directors and Independent Directors - what is the difference? Show Notes 1) Download the Singapore Code of Corporate Governance below https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf...

Provision 2.4 is a long one  “The Board and board committees are of an appropriate size, and comprise directors who as a group provide the appropriate balance and mix of skills, knowledge, experience, and other aspects of diversity such as gender and age, so as to avoid groupthink and foster constructive debate. The board diversity policy and progress made towards implementing the board diversity...

Provision 2.5 states that “Non-executive directors and/or independent directors, led by the independent Chairman or other independent director as appropriate, meet regularly without the presence of Management. The chairman of such meetings provides feedback to the Board and/or Chairman as appropriate.” This raises eyebrows - is this asking Directors to go behind the back of management? Will discus...

Principle 3 requires this of firms  “There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making.” One person having a dual role brings expediency to decision making. What would be the cost-benefit analysis to the above principle? Show Notes 1) Download the Singapore Code of Corporate Governance be...

Provision 1.4 goes like this  “ Board committees, including Executive Committees (if any), are formed with clear written terms of reference setting out their compositions, authorities and duties, including reporting back to the Board. The names of the committee members, the terms of reference, any delegation of the Board’s authority to make decisions, and a summary of each committee’s activities,...

Provision 1.5  says “ Directors attend and actively participate in Board and board committee meetings. The number of such meetings and each individual director’s attendances at such meetings are disclosed in the company’s annual report. Directors with multiple board representations ensure that sufficient time and attention are given to the affairs of each company " This provision speaks of th...

Provision 1.6 is brief,  “Management provides directors with complete, adequate and timely information prior to meetings and on an on-going basis to enable them to make informed decisions and discharge their duties and responsibilities.” How are directors to know if they information is adequate and complete? If management leaves out an important detail, will a director be able to identify the omis...

Provision 1.7 says,  “Directors have separate and independent access to management, the company secretary, and external advisers (where necessary) at the company’s expense. The appointment and removal of the company secretary is a decision of the Board as a whole.” The Board has various independent avenues for information gathering. Interestingly, the company secretary is mentioned here, what does...

Principle 1 states that “The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.” How does the Board work with Management? And how does it contribute to the firm's long-term success? Show Notes 1) Download the Singapore Code of Corporate Governance below https://www.mas.gov.sg/-/media/mas/news-and-public...

Provision 1.1 is a chunky one  "Directors are fiduciaries who act objectively in the best interests of the company and hold management accountable for performance. The Board puts in place a code of conduct and ethics, sets the appropriate tone-from–the-top, organizational culture and ensures accountability within the company. Directors facing conflicts of interest recuse themselves from discu...

Provision 1.2 reads  “Directors understand the company’s business as well as their directorship duties. Directors are provided with opportunities to develop and maintain their skills and knowledge at the company’s expense. The induction, training and development provided to new and existing directors are disclosed in the company’s annual report." If a Director does not have the relevant indus...

Provision 1.3 is a straightforward one  “ The Board decides on matters that require its approval and clearly communicates this to Management in writing. Matters requiring board approval are disclosed in the company’s annual report. ” Which vital items are usually reserved for the Board's approval? Is a Board's approval always final or might it require further approvals from others? Show...

Who is the main target audience for the Corporate Governance Code? What are the differences between Principles and Provisions? What if a firm is non-compliant with a provision? The next episode looks at that so do listen to them both together! Show Notes 1) Download the Singapore Code of Corporate Governance below https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governanc...

What happens if a firm is in breach of Provision 3.1 , which states that the Chairman and CEO should be separate person? In what sense must the firm "comply or explain"? Show Notes 1) Download the Singapore Code of Corporate Governance below https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf 2) Join the preparatory cou...

No one does a podcast on the Singapore Code of Corporate Governance, so why am I doing this?  To benefit students taking the Singapore Chartered Accountant exams (and others studying similar things!) Exams aside, we see how Corporate Governance benefits us in other vital areas such as investing.  Show Notes 1) Download the Singapore Code of Corporate Governance below https://www.mas.gov.sg/-/media...