Raising the governance bar: Disclosure mindset must change

It is well known that the local financial market leans heavily on disclosure as its central pillar, ie that companies have a duty to release all material information to everyone on a timely basis in an honest and transparent manner so as to allow for informed investment decisions.

Yet despite this regime having been progressively installed and strengthened over the past two decades, and despite the best efforts of regulators and other corporate supervisory bodies to ingrain good governance practices in the ranks of listed firms, the jury is still out on just how well it operates today.

Based on anecdotal feedback from industry observers, compliance with corporate governance requirements is seen privately in some circles as being largely a "box-ticking'' exercise, with many viewing it as merely a necessary nuisance in order to stay listed whilst keeping regulators at bay. Observance of the rules is then kept to a bare minimum and where possible, corners are cut. For example, companies still routinely release vague and meaningless information, one of the most glaring examples being when companies fail to give details of executive remuneration as per the recommendations of the Code of Corporate Governance and are approached by SGX for an explanation.