You are here
Singapore companies may miss corporate governance compliance deadlines
SINGAPORE'S listed companies may miss critical timelines in adhering to the country's Code of Corporate Governance, particularly in the area of board independence, at the current rate of progress.
According to a new analysis of data in this year's Governance and Transparency Index (GTI), Singapore-listed firms will take until 2020 to comply fully with board independence guidelines, even though companies are required to be aligned to the Code by the end of their 2017 financial year.
Only 268 firms (41.6 per cent) have complied with the recommendations under the Code, which was last revised in 2012. Under the revised Code, listed firms are required to appoint an independent chairman or have independent directors make up at least half the board in instances where the chairman is not an independent director. More than half of the companies examined in GTI 2014 (376 firms) have yet to meet this requirement.
Listed firms have also been slow in disclosing their executive directors' exact remuneration, especially that of the chief executive officers (CEOs). While the number of firms disclosing the exact pay package of their CEOs increased to 19.3 per cent from 7.8 per cent a year ago, there remains a large majority which has not done so, citing confidentiality, talent-poaching and competition as reasons behind disclosing such information.
The annual GTI, jointly published by CPA Australia and NUS Business School's Centre for Governance, Institutions and Organisations, examined a total of 644 Singapore-listed companies, which released their 2013 annual reports before May 31, 2014. The latest analysis also found much room for improvement in other areas highlighted in the Code.
The study found that the number of independent directors who have served for more than nine years increased from 37.2 per cent last year to 37.8 per cent in GTI 2014, even though the Code recommends that the independence of any director who has served beyond nine years be subject to rigorous review. A total of 243 companies are now required to re-assess the independence of their 469 long-serving independent directors.