Preparing for an independent directors-led corporate board

WE are entering a phase in our corporate governance history where more independent directors (IDs) are expected to lead corporate boards with majority voting control at board meetings.

This will be largely precipitated by the revised Code of Corporate Governance issued in August 2018, which requires that "Independent directors make up a majority of the Board where the Chairman is not independent" (Provision 2.2), and "Non-executive directors make up a majority of the Board" (Provision 2.3).

Provision 2.2, which comes into effect on Jan 1 2022, ups the ante from the 2012 Code requirement that IDs comprise at least half of the board where there is no independent chair.

Companies have been actively taking steps to comply with the 2012 Code requirement over the years. The Singapore Directorship Report 2018 issued by the Singapore Institute of Directors reported that, of the 516 companies (78.2 per cent of the companies in the study) that fell within the purview of the 2012 Code Guideline 2.2, there was a 72.1 per cent compliance rate as of 2018, up from the 60.8 p…