|The NC should decide how the Board's performance may be evaluated and propose objective performance criteria. Such performance criteria, which allow for comparison with industry peers, should be approved by the Board and address how the Board has enhanced long-term shareholder value. These performance criteria should not be changed from year to year, and where circumstances deem it necessary for any of the criteria to be changed, the onus should be on the Board to justify this decision.|
This Guideline covers the performance criteria for the evaluation of Boards.
For a performance evaluation to be effective, it is important to set objective performance criteria against which results can be compared.
This Guideline sets out the characteristics of these objective performance criteria:
- Should show how the Board has enhanced long-term shareholder value.
- Should facilitate comparisons with industry peers.
- Should not change materially from year to year so that comparison of performance across the years can be tracked. Where circumstances require the criteria to change, these should be adequately explained.
The Board should approve such criteria at the beginning of the evaluation process.
B. SGX Disclosure Guide
C. Related Rules and Regulations
D. CG Guides
- NC Guide 1.3: Terms of Reference [NC Composition].
- NC Guide Appendix 1C: Sample NC Terms of Reference [NC Composition].
- NC Guide 2.2: NC Calendar [NC Agenda].
- NC Guide Appendix 2C: Sample NC Calendar [NC Agenda].
- NC Guide 6.1: Introduction [Board and Director Evaluation].
- NC Guide 6.2: Board Evaluation [Board and Director Evaluation].
- NC Guide 6.3: Board Committee Evaluation [Board and Director Evaluation].
- NC Guide Appendix 6C: Sample Board Performance Evaluation Form [Board and Director Evaluation].
- NC Guide Appendix 6D: Sample Board Committee Performance Evaluation Forms [Board and Director Evaluation].
E. Related Articles
- “Board evaluation: More can be done” by Yvonne Goh. (463KB)
- “Seven steps to effective board and director evaluations” by Geoffrey Kiel and James Beck. (626KB)
- “The nominating committee and its role in identifying directors for renewal and new appointments” by Kala Anandarajah. (112KB)
- “Using evauation to build strong boards” by Na Boon Chong and Grace Wu. (96KB)