IT may be timely to review Singapore's Code of Corporate Governance for listed companies given that the last such assessment was done back in 2012.
Ong Chong Tee, deputy managing director (financial supervision) of the Monetary Authority of Singapore (MAS), made this point in his address at the opening on Monday of the 7th Singapore Corporate Governance Week, organised by the Securities Investors Association (Singapore).
"Any review will need to carefully weigh the differing perspectives of different stakeholders. What is needed is a balanced and progressive code that not only serves to enhance Singapore's corporate governance standards, but is also pragmatic and workable in practice," said Mr Ong.
First implemented in 2001, the code is a set of best practice recommendations MAS had issued.
Given the size and sophistication of Singapore's financial sector, "it is neither possible nor realistic for the MAS to be able to detect and prevent all bad behaviours or criminal acts", said Mr Ong.
"It is also not ideal nor desirable for MAS to rely on overly prescriptive and conservative one-size-fits-all rules without inadvertently stifling legitimate business growth and innovation," he pointed out.
He said this is why good governance driven by boards must feature as an important frontline defence against bad policies, poor conduct and deficient risk-management practices.
A competent management must be complemented by a proactive board that places good corporate governance as a priority area of focus - an area that will have increased supervisory engagement by the MAS with financial institutions, Mr Ong said.
One area that will need to be considered is board diversity.
This, as a board that has a good mix of experiences, background and technical competencies will result in more robust and thorough discussions and in decision-making by minimising blind spots or information gaps, noted Mr Ong, who also touched on the issue of high-quality corporate disclosures.
Said Mr Ong: "Two months ago, SGX issued a report that examined the presence and quality of disclosures in relation to the corporate governance code. The findings indicate that disclosures, while generally adequate, have room for improvement. One area, in my view, is for companies to provide better disclosures on remuneration, as well as the link between remuneration and performance. Another area is on more clarity with regard to diversity policies and the company's plans on them."
In wrapping up his speech, Mr Ong said "board of directors should set the tone from the top, and to walk the talk so that there is resonance from the tone in the middle and tone at the front business units".
Good governance, he said, must be guided by both doing "right" and doing "good" - and thereby doing well for the companies over the long term and that MAS will continue to support a collaborative effort in shaping Singapore's corporate governance landscape.