SINGAPORE: The Monetary Authority of Singapore (MAS) has accepted all recommendations by the Corporate Governance Council and issued the revised Code of Corporate Governance.
The revised code makes clear how companies should adopt the comply-or-explain regime, MAS said in a media release on Monday (Aug 6).
Advertisement"The SGX Listing Rules have been amended to clarify the expectations under the comply-or-explain regime, to ensure that companies provide meaningful disclosures to their stakeholders. Key changes to the code to encourage board renewal, strengthen director independence and enhance board diversity will reinforce board competencies," MAS said.
"Other Code revisions on disclosures of the relationship between remuneration and value creation, and consideration of the interests of groups other than shareholders will encourage better engagement between companies and all stakeholders," MAS added.
The Code of Corporate Governance is applicable to listed companies in Singapore on a comply-or-explain basis. It requires companies to adhere to the principles of the code and provide explanations for variations from its provisions or guidelines in their annual reports.
The revised code will take effect for annual reports covering financial years commencing from Jan 1, 2019, MAS added.
AdvertisementAdvertisementA 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. The Council will be dissolved with the issuance of the revised Code, MAS added.
CORPORATE GOVERNANCE ADVISORY COMMITTEE
In line with the Council’s recommendations, MAS said it will also establish an independent Corporate Governance Advisory Committee (CGAC) to advocate good corporate governance practices.
The CGAC will monitor companies’ implementation of the code, and provide support to companies by promulgating good practices and areas for improvement. The CGAC will also advise regulators on corporate governance issues.
The committee will comprise senior practitioners with experience as board chairmen or directors, corporate governance experts and representatives from diverse stakeholder groups. MAS expects to establish the CGAC by the end of this year.
Mr Ong Chong Tee, deputy managing director at MAS said: “The Corporate Governance Council has weighed all inputs and feedback carefully in arriving at a set of balanced and meaningful recommendations.
"The revised Code is more concise and less prescriptive, and is designed to encourage more thoughtful application. It will help spur better corporate governance practices among companies to sustain long-term business performance. The establishment of the CGAC will strengthen the corporate governance eco-system and enhance market discipline.”
The Code of Corporate Governance was first issued by the Corporate Governance Committee on Mar 21, 2001. The Code was subsequently revised on Jul 14, 2005 and again on May 2, 2018.
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