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Corporate Governance in The Asia-Pacific (Singapore) (Board matters…
Corporate Governance in The Asia-Pacific (Singapore)
Key characteristics
Legal system - common law
Board structure - Unitary
Predominant ownership structure - Families; state
Important aspect - Influence of State (for example, via Temasek Holdings)
Main business form - Public limited companies
Board matters
Board composition and guidance
should be a strong and independent element on the Boardm which able to exercise objective judgement on corporate affairs independently
no individual or small group of individuals should be allowed to dominate the Board's decision making
Board membership
There should be a formal and transparent process for the appointment and re-appointment of directors to the Board
Chairman and CEO
should be a clear division of responsibilities between leadership of the Board
The CEO responsible for managing the company's business
No individual should represent a considerable concentration of power
Board performance
should be a formal annual assessment of the effectiveness of the Board as a whole and its committees
the contribution of each director to the effectiveness of the Board
The Board's conduct of affairs
Every company should be headed by an effective Board to lead and control the company
Board is collectively responsible for the long-term success of the company
Board works with Management to achieve this objective and Management remains accountable to the Board
Access to information
directors should be provided with complete, adequate and timely information prior to the board meetings and on an on-going basis
Remuniration matters
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
should be appropriate to attract, retain and motivate the directors
to provide good stewardship of the company
key management personnel to successfully manage the company
companies should avoid paying more than is necessary for this purpose
Disclosure of 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
provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key management and performances
Procedures for developing remuneration policies
should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration of individual directors
No directors should be involved in deciding his own remuneration
Accountability and audit
Accountability
Board should present a balanced and understandable assessment of the company's
performance
position
prospects
Audit committee
Board should establish an AC with written terms of reference which clearly set out its authority and duties
Internal audit
Company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits
Risk management and internal controls
Board is responsible for the governance of risk
Board ensure that Management maintains a sound system of risk management and internal control to safeguard shareholders' interests and the company's assets
Board should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives
Shareholder rights and responsibilities
Shareholder rights
Companies should treat all shareholders fairly and equitably
Should recognize, protect, and facilitate the exercise of shareholders' rights
continually review and update such governance arrangements
Communication with shareholders
Companies should actively engage their shareholders
put in place an investor relations policy to promote regular, effective and fair communication with shareholders
Conduct of shareholder meetings
Companies should encourage greater shareholder participation at general meetings of shareholders
allow shareholders the opportunity to communicate their views on various matters affecting the company