Firms need to engage with minority shareholders more with rule changes

THE latest consultation papers issued by the Singapore Exchange on the Quarterly Reporting Framework and the Code of Corporate Governance review contain two recommendations which I believe significantly enhances the role and the responsibility of minority shareholders.

These are the votes taken by a company to exit quarterly reporting and to consider the independence of an independent director (ID) who has spent nine years on the board. In both these instances, the vote has to pass the minority shareholders which in effect gives them actual decision-making capabilities.

In the current corporate governance regime, minority shareholders can scarcely determine the outcome of any company resolution. Except for the occasional instances of delistings, scheme of arrangements and in the absence of a controlling shareholder, whichever way minority shareholders vote almost never matter.