Complying with 'comply or explain'

SINGAPORE, like many of its Commonwealth counterparts, has adopted a Code of Corporate Governance based on a "comply or explain" model. This means companies must comply with the principles and guidelines contained in the Code, or explain the non-compliance.

Cynics have cited examples such as non-disclosure of director's remuneration on a named basis (only 31 per cent of all listed companies did so in their fiscal 2013 annual reports) and lack of gender diversity (less than 10 per cent of directors are female, and 56 per cent of listed boards have no women directors) along with these companies' failures to provide satisfactory reasons - or even an explanation - as to why the "comply or explain" approach is far too voluntary and therefore does not work. They have argued for mandatory rules instead.

Governance responsibility