eGuide to CG Code

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0. Overview

Introduction to Corporate Governance

Corporate governance refers to the set of systems, principles and processes by which a company is governed.

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Global Overview of Corporate Governance

The origins of modern corporate governance can be traced to the “principal-agent” problem.

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Singapore Regulatory Framework

In the context of Singapore, corporate governance practices can be broadly classified in the following conformance continuum:

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History of the Singapore Code

The Singapore Code of Corporate Governance follows similar codes issued on a “comply or explain” basis in the UK and other countries.

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Comply or Explain

The Code of Corporate Governance applies to all listed companies in Singapore on a “comply or explain” basis. This means that companies must either comply with the principles and guidelines contained in the Code, or explain why there is a non-compliance.

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1. Board Matters

Principle 1 - The Board's conduct of affairs

Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the long-term success of the company. The Board works with Management to achieve this objective and Management remains accountable to the Board.

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Principle 2 - Board composition and guidance

There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management and 10% shareholders2. No individual or small group of individuals should be allowed to dominate the Board's decision making.

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Principle 3 - Chairman and Chief Executive Officer

There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company's business. No one individual should represent a considerable concentration of power.

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Principle 4 - Board membership

There should be a formal and transparent process for the appointment and re-appointment of directors to the Board.

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Principle 5 - Board performance

There should be a formal annual assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each director to the effectiveness of the Board.

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Principle 6 - Access to information

In order to fulfil their responsibilities, directors should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities.

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2. Remuneration Matters

Principle 7 - Procedures for developing remuneration policies

There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

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Principle 8 - Level and mix of remuneration

The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the directors to provide good stewardship of the company, and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose.

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Principle 9 - Disclosure on remuneration

Every company should provide clear disclosure of its remuneration policies, level and mix of remuneration, and the procedure for setting remuneration, in the company's Annual Report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key management personnel, and performance.

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3. Accountability and Audit

Principle 10 - Accountability

The Board should present a balanced and understandable assessment of the company's performance, position and prospects.

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Principle 11 - Risk managment and internal controls

The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard shareholders' interests and the company's assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives.

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Principle 12 - Audit committee​

The Board should establish an Audit Committee ("AC") with written terms of reference which clearly set out its authority and duties9.

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Principle 13 - Internal audit​

The company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits.

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4. Shareholder Rights and Responsibilities

Principle 14 - Shareholder rights

Companies should treat all shareholders fairly and equitably, and should recognise, protect and facilitate the exercise of shareholders' rights, and continually review and update such governance arrangements.

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Principle 15 - Communication with shareholders

Companies should actively engage their shareholders and put in place an investor relations policy to promote regular, effective and fair communication with shareholders.

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Principle 16 - Conduct of shareholder meetings​

Companies should encourage greater shareholder participation at general meetings of shareholders, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

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5. eGuide Glossary

6. Disclosure of CG arrangements

7. The Role of Shareholders


eGuide to CG Code
Board Matters
Principle 1
Guideline 1.1
Guideline 1.2
Guideline 1.3
Guideline 1.4
Guideline 1.5
Guideline 1.6
Guideline 1.7
Principle 2
Guideline 2.1
Guideline 2.2
Guideline 2.3
Guideline 2.4
Guideline 2.5
Guideline 2.6
Guideline 2.7
Guideline 2.8
Principle 3
Guideline 3.1
Guideline 3.2
Guideline 3.3
Guideline 3.4
Principle 4
Guideline 4.1
Guideline 4.2
Guideline 4.3
Guideline 4.4
Guideline 4.5
Guideline 4.6
Guideline 4.7
Principle 5
Guideline 5.1
Guideline 5.2
Guideline 5.3
Principle 6
Guideline 6.1
Guideline 6.2
Guideline 6.3
Guideline 6.4
Guideline 6.5
Remuneration Matters
Principle 7
Guideline 7.1
Guideline 7.2
Guideline 7.3
Guideline 7.4
Principle 8
Guideline 8.1
Guideline 8.2
Guideline 8.3
Guideline 8.4
Principle 9
Guideline 9.1
Guideline 9.2
Guideline 9.3
Guideline 9.4
Guideline 9.5
Guideline 9.6
Accountability and Audit
Principle 10
Guideline 10.1
Guideline 10.2
Guideline 10.3
Principle 11
Guideline 11.1
Guideline 11.2
Guideline 11.3
Guideline 11.4
Principle 12
Guideline 12.1
Guideline 12.2
Guideline 12.3
Guideline 12.4
Guideline 12.5
Guideline 12.6
Guideline 12.7
Guideline 12.8
Guideline 12.9
Principle 13
Guideline 13.1
Guideline 13.2
Guideline 13.3
Guideline 13.4
Guideline 13.5
Shareholder Rights and Responsibilities
Principle 14
Guideline 14.1
Guideline 14.2
Guideline 14.3
Principle 15
Guideline 15.1
Guideline 15.2
Guideline 15.3
Guideline 15.4
Guideline 15.5
Principle 16
Guideline 16.1
Guideline 16.2
Guideline 16.3
Guideline 16.4
Guideline 16.5
eGuide Glossary
Disclosure of CG arrangements
The Role of Shareholders

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