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 applies on a “comply or explain” basis, similar to codes issued in the UK and other countries.

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THE “COMPLY OR EXPLAIN” REGIME

The Code of Corporate Governance applies to all listed companies in Singapore on a “comply or explain” basis.

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INTRODUCTION

1. DEFINITION OF CORPORATE GOVERNANCE

2. HISTORY AND STRUCTURE OF THE CODE

3. ROLE OF THE BOARD

4. ROLE OF THE CHAIR

5. FOCUS ON LONG TERM AND SUSTAINABILITY

COMPLY OR EXPLAIN

6. REVISED CODE STRUCTURE AND APPROACH

7. MANDATORY PRINCIPLES

8. PROVISIONS AND VARIATIONS

9. THOUGHTFUL AND MEANINGFUL APPLICATION

Principle 1 - The Board's conduct of affairs

The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.

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Principle 2 - Board composition and guidance

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.

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Principle 3 - Chairman and Chief Executive Officer

There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making.

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Principle 4 - Board membership

The Board has a formal and transparent process for the appointment and re-appointment of directors, taking into account the need for progressive renewal of the Board.

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Principle 5 - Board performance

The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its board committees and individual directors.

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Principle 6 - Procedures for developing remuneration policies

The Board has a formal and transparent procedure for developing policy on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration.

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Principle 7 - Level and mix of remuneration

The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the company.

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Principle 8 - Disclosure on remuneration

The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation.

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Principle 9 - RISK MANAGEMENT AND INTERNAL CONTROLS

The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders¹⁷.

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Principle 10 - Audit committee​

The Board has an Audit Committee ("AC")¹⁸ which discharges its duties objectively.

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PRINCIPLE 11 - SHAREHOLDER RIGHTS AND CONDUCT OF GENERAL MEETINGS

The company treats all shareholders fairly and equitably in order to enable them to exercise shareholders' rights and have the opportunity to communicate their views on matters affecting the company. The company gives shareholders a balanced and understandable assessment of its performance, position and prospects.

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PRINCIPLE 12 - ENGAGEMENT WITH SHAREHOLDERS

The company communicates regularly with its shareholders and facilitates the participation of shareholders during general meetings and other dialogues to allow shareholders to communicate their views on various matters affecting the company.

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PRINCIPLE 13 - ENGAGEMENT WITH STAKEHOLDERS

The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served.

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