eGuide to CG Code

Every Board should implement a process to be carried out by the NC for assessing the effectiveness of the Board as a whole and its board committees and for assessing the contribution by the Chairman and each individual director to the effectiveness of the Board. The Board should state in the company's Annual Report how the assessment of the Board, its board committees and each director has been conducted. If an external facilitator has been used, the Board should disclose in the company's Annual Report whether the external facilitator has any other connection with the company or any of its directors. This assessment process should be disclosed in the company's Annual Report.
 
A. Explanation

This Guideline emphasises the importance of an assessment process for the Board, the Board Committees and the directors.

It is an established practice for companies to have a system of regular appraisals for individual staff and the organisational units. The purpose is to assess their performances so that in part, they can be rewarded or penalised. More importantly, they can improve on their future performance with the appropriate support and changes.

Although it is the highest governing body in the company, the Board should not be exempted from the evaluation process.

Board evaluations, however, differ from other evaluations in one key aspect: the process is primarily one of self-evaluation, that is the Board and its directors evaluate each other. To provide a greater level of objectivity in the evaluation process, the use of external independent facilitators is also generally encouraged.

The Guideline calls for the disclosure of not just the evaluation process in the annual report, but also whether external facilitators were used and, if so, whether they had any relationships with the company or its directors.

To be comprehensive, the Guideline calls for the evaluation to be conducted at three levels:

  • The Board as a whole.
  • Each of the Board Committees.
  • Each individual director including the Board Chairman.

The next two Guidelines provide guidance on how the evaluations at these levels should be conducted.

 

B. SGX Disclosure Guide
  1. What was the process upon which the Board reached the conclusion on its performance for the financial year?
  2. Has the Board met its performance objectives?

 

C. Related Rules and Regulations
  • Nil.

 

D. CG Guides
  • NC Guide 1.3: Terms of Reference [NC Composition].
  • NC Guide Appendix 1C: Sample NC Terms of Reference [Sample NC Terms of Reference].
  • NC Guide 2.2: NC Calendar [NC Agenda].
  • NC Guide Appendix 2C: Sample NC Calendar [NC Agenda].
  • NC Guide 6.1: Introduction [Board & Director Evaluation].
  • NC Guide 6.2: Board Evaluation [Board & Director Evaluation].
  • NC Guide 6.3: Board Committee Evaluation [Board & Director Evaluation].
  • NC Guide 6.4: Director Evaluation [Board & Director Evaluation].
  • NC Guide Appendix 6B-1: 360° Assessment Process for Executive Directors [Board & Director Evaluation].
  • NC Guide Appendix 6C: Sample Board Performance Evaluation Form [Board & Director Evaluation].
  • NC Guide Appendix 6D: Sample Board Committee Performance Evaluation Forms [Board & Director Evaluation].
  • NC Guide 8.2: Disclosure Requirements [Disclosure Requirements and Guidelines].

 

E. Related Articles

 

eGuide to CG Code
Overview
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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