Spare the rod, spoil the listed company

LISTED companies here are motivated by the stick, not the carrot, said a recent study. The findings were staggering: An overwhelming majority (98 per cent) complied with risk management disclosures when they were mandated by listing rules, but only a pitifully small proportion (12 per cent) complied with a similar requirement in the non-mandatory Code of Corporate Governance.

In response to those findings, however, Singapore Exchange (SGX) - which regulates listed companies - said it does not believe the answer lies in more regulation, but in greater rewards for good behaviour.

But here's the thing: When most listed companies aren't bothering to comply with a key provision in the Code because it's neither mandatory nor legislated, clearly the gentle persuasion and praise that have been used all along are not enough.