MAS seeks feedback on corporate governance regulations for banks, insurers

[SINGAPORE] The Monetary Authority of Singapore (MAS) is seeking feedback on proposed changes to regulations covering corporate governance for banks, insurers and their designated financial holding companies.

This is part of its regular review to keep governance standards current and effective.

The proposed changes include increasing the minimum board size and requiring prior approval for key appointments at these financial institutions.

The “targeted” regulatory updates, which are detailed in a consultation paper, “strengthens safeguards” in specific areas where risks and practices have evolved across banks and insurers.

They also streamline requirements for financial institutions, with less impact on customers and the financial system, said the regulator on Wednesday (Sep 30).

Refinement areas

One of MAS’ suggestions is to refine the criteria for determining whether directors are independent from management, business relationships and substantial shareholders.

For example, directors employed by, or have dealings with related corporations or affiliates, will be deemed non-independent from management and business relationships.

Second, MAS is proposing to increase the minimum board size and require a majority of independent directors for domestic systemically important banks and insurers, as well as full banks.

The changes are intended to ensure that boards continue to have a broad range of perspectives and expertise, along with independent oversight, as these institutions grow in scale and complexity, said MAS.

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It is also looking to require prior approval for additional key appointments, such as chairperson of the nominating committee of locally incorporated banks and insurers, and chief information officer of domestic systematically important banks.

“These proposals reflect the increasing importance of succession planning, technology and information risk management at the board and senior management levels,” said the regulator.

Finally, MAS proposed to remove the requirement for prior approval of certain board and senior management appointments for financial institutions assessed to have less retail reach or lower systemic importance.

This seeks to ensure that regulatory requirements remain risk-proportionate and do not impose unnecessary regulatory burden where additional approvals are not needed.

The public may provide feedback on the proposed changes online through a FormSG link by Dec 9.