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A strategic move to enhance independence of directors

By proposing two options - the hard-limit and the two-tier option - the Corporate Governance Council hopes to generate more discussion in boardrooms.

The Nine-Year Rule was intended to address the concern that an independent director's independence may be compromised given his familiarity with management. But there is empirical evidence from a study of US firms from 1998 to 2010 that suggests that a nine-year tenure period is not unusual.

The ongoing consultation on proposed revisions to the Code of Corporate Governance and the SGX Listing Rules by the Corporate Governance Council (CGC) and SGX is timely, given that corporate governance practices globally have continued to evolve since the last review of the Code five years ago...

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