Corporate governance: more teeth and substance needed

ON April 24, 2019, Chip Eng Seng Corporation (CES) announced that it had received a query from Singapore Exchange Securities Trading (SGX-ST) the day earlier regarding the disclosure of remuneration in its FY2018 annual report.

SGX's query states: "We refer to the company's FY2018 annual report. As required by Rule 1207(12) of the Listing Manual, please make disclosures as recommended in paragraph 9.2 of the Code or otherwise explain the reason(s) for the deviation from the following Code recommendations. The company reported that it did not disclose directors' remuneration in the nearest thousand dollars as it is commercially sensitive. The (top) band for directors was stated as 'above S$1,000,000' without an upper limit. Please provide an upper limit to the band."

The company's reply said: "Chia Lee Meng, Raymond ("Mr Chia") is the executive director (ED) and group chief executive officer (CEO) of the company, a key management officer of the company and its subsidiaries (collectively, "the group"). The board had decided not to disclose the upper limit to the band of Mr Chia's remuneration in view of the sensitive and confidential nature of such disclosure. The board believes such disclosure would pose as a disadvantage to the group as it operates in a highly competitive environment. Such information was accordingly not disclosed in the FY2018 annual report to protect the interests of the group."