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CORPORATE GOVERNANCE in Singapore (KEY PRINCIPLES (Board Matters (Board…
CORPORATE GOVERNANCE
in
Singapore
The Code of Corporate Governance (hereafter ’the Code’) was introduced in 2001
Purpose: Promote a high standard of corporate governance amongst listed companies in Singapore
In terms of disclosure of corporate governance arrangements, the Code states that
the Listing Manual requires listed companies to describe in their company’s annual reports their corporate governance practices with specific reference to the principles of the Code, as well as disclose and explain any deviation from any guideline of the Code.
KEY PRINCIPLES
Remuneration Matters
Level and mix of remuneration
Principle 8—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 (b) key management personnel
Disclosure of remuneration
Principle 9—
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
Procedures for developing remuneration policies
Principle 7—
There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors.
Accountability & Audit
Risk management and internal controls
Principle 11—
The Board is responsible for the governance of risk.
Audit committee
Principle 12—
The Board should establish an Audit Committee (“AC”) with written terms of reference which clearly set out its authority and duties.
Accountability
Principle 10—
The board should present a balanced and understandable assessment of the company’s performance, position, and prospects
Internal audit
Principle 13—
The company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits
Board Matters
Board composition and guidance
Principle 2—
There should be a strong and independent element on the Board
Chairman and Chief Executive Officer
Principle 3—
There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company’s business.
Board’s conduct of affairs
Principle 1—
Every company should be headed by an effective Board to lead and control the company
Board membership
Principle 4—
There should be a formal and transparent process for the appointment and re-appointment of directors to the Board.
Board performance
Principle 5—
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.
Access to information
Principle 6—
In order to fulfill 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
Shareholder rights and responsibilities
Communication with shareholders
Principle 15—
Companies should actively engage their shareholders and put in place an investor relations policy to promote regular, effective and fair communication with shareholders
Conduct of shareholder meetings
Principle 16—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
Shareholder rights
Principle 14—
Companies should treat all shareholders fairly and equitably, and should recognize, protect, and facilitate the exercise of shareholders’ rights, and continually review and update such governance arrangements