Corporate governance at the crossroads

IN AUGUST, the Monetary Authority of Singapore (MAS) issued the fourth edition of the Code of Corporate Governance for Singapore, after an extensive consultation of changes proposed by the Corporate Governance Council (CGC).

Since the Code was first introduced in 2001, there has been a continual enhancement in standards in areas such as board composition, risk management, and engagement with shareholders and stakeholders. Whether there has been an overall improvement in substance is more debatable.

For this latest review, certain core corporate governance guidelines have been hard-coded in the listing rules. The "comply or explain" approach has been enhanced not only by making compliance with the principles mandatory, but variations from provisions are only acceptable to the extent that companies "explicitly state and explain how their practices are consistent with the aim and philosophy of the Principle in question".