Explaining "comply or explain"

THE approach to regulating for good corporate governance differs in various jurisdictions. The United States, for example, has the Sarbanes-Oxley Act, a highly technical set of corporate governance rules that all its public companies must adopt. These rules are seen as highly prescriptive.

In contrast, many other countries, particularly in the Commonwealth, have adopted codes of corporate governance. Singapore's Code of Corporate Governance (the Code) was first established in 2001 and last revised in 2012.

These codes are based on a "comply or explain" approach - which, plainly put, means that companies either comply with the principles and guidelines set out or explain why they have not.