THE introduction of a mandatory nine-year tenure limit for independent directors (IDs) by the Singapore Exchange (SGX) adds the Republic to the list of markets with a mandatory limit.

In Malaysia, a mandatory 12-year limit comes into effect in June this year, with IDs who have served 12 years or more having to resign or be re-designated by Jun 1, 2023. An annual two-tier vote remains in place under the Malaysian Code on Corporate Governance 2021, for IDs who have served more than nine years and less than 12 years. Clearly, Malaysia, which introduced two-tier vote for IDs before Singapore, has – like Singapore – decided that the two-tier vote is not sufficient for improving board independence and renewal. SGX will revoke the two-tier vote immediately.

Singapore has a longstanding issue with IDs who simply would not leave. A 2015 study by me and Chew Yi Hong found that the longest tenure for an ID was 45 years, followed by two who had served for 33 and 32 years. One ID had served a cumulative tenure of 96 years on his four boards, and another served 80 years on four boards.