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Most boards rely on personal contacts to find new directors: SID

The Singapore Central Business District (CBD) skyline, showing skyscrapers which house offices and banks and across it, the Singapore River.

INTENSE competition and manpower constraints were the most cited challenges to business growth according to Singapore directors, the Singapore Institute of Directors (SID) said on Wednesday.

Disclosing the exact remuneration of directors and chief executives remains the single most challenging governance guideline for companies to follow, according to the 2015 Board of Directors Survey.

The vast majority of boards rely on personal contacts to identify new members, and most cited a lack of credible and suitable candidates for the lack of gender diversity among directors.

Most boards also did not set a limit on multiple directorships.

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"This latest survey shows some improvement in disclosure but companies need to step up as stakeholders are demanding greater transparency and higher standards of corporate governance," said June Sim, head of listing compliance at the Singapore Exchange.

About 66 per cent of respondents identified intense competition as a key challenge to growth in their businesses. That was followed by manpower constraints, which were cited by 57 per cent of respondents.

Only 45 per cent of boards that responded disclosed the detailed remuneration of each individual director and the CEO as recommended by the Code of Corporate Governance, the survey found. This was however an improvement from the 32 per cent compliance found in the previous survey, in 2013.

About 52 per cent of the respondents said a lack of suitable and credible candidates was the main challenge in increasing gender diversity on their boards.

But  93 per cent said personal contacts were the main way of finding new board members.

In terms of multiple directorships, 75 per cent of respondents said there was no limit on their boards.