Code of Corporate Governance

The Monetary Authority of Singapore (MAS) has published a press release to inform of a revised „Practice Guidance“ to the Code of Corporate Governance. The guidance is aimed at assisting listed firms in Singapore develop adequate and good corporate governance standards within their entities. It supplements the Code of Corporate Governance in that it provides detailed guidance and illustrative examples as to how to go about adhering to the principles set out in the Code.
Naturally and similar to the Code, it covers issues such as
(1) The Board of Directors‘ key responsibilities;
(2) Issues to consider in the composition of the Board (e.g. diversity, knowledge, etc.)
(3) Policies and procedures as regards the nomination (appointment) process to become a member of the Board;
(4) Performance evaluations of the Board’s actions;
(5) The procedures that shall be observed in the development of remuneration policies of senior staff;
(6) Disclosures about remuneration policies;
(7) Accountability of the Board particularly in view of internal audits and risk management controls.
For example, Principle 2 under the Code states that „The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company“. The guidance now describes what independence means in this context in terms of nominating independent directors, the criteria that should be applied to ensure such director independence, and instances where a director may not be considered independent to the board of governors.
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Details on the guidance may be found in the enclosed document. It shall be noted that the Code and corresponding guidance also applies to REITs as listed entities.