Major shareholders must play part in governance

THE Monetary Authority of Singapore's call for better board diversity and disclosures earlier this week is relevant and timely as the local market prepares itself to embrace new structures such as dual-class shares that will test the quality of local corporate governance.

The suggestion from investor lobby group Securities Investors' Association (Singapore) to institute regulation requiring boards to have a formal independent review of long-time independent directors and publicise the review findings is also a well-intentioned one.

It is no doubt important to maintain focus on the independence of long-serving directors and on keeping the Code of Corporate Governance up to date. But those alone cannot level the playing field for minorities if the role of one particularly crucial group in corporate governance is glossed over: that of the company's major shareholders, and especially the ones who have board seats.