Listed companies are being far too slow in complying with the revised Code of Corporate Governance, according to a new survey.
For instance, the code requires companies to appoint an independent chairman or ensure that independent directors make up at least half of the board by the end of financial year 2017. The survey found that only 268 or 41.6 per cent of the 644 companies polled had adhered to this requirement.
The findings suggest that full compliance with board independence guidelines might not be achieved until 2020.
The new guidelines stem from revisions made in 2012 by the Monetary Authority of Singapore, and are aimed at improving governance and disclosure practices in areas that include board composition and independence and directors’ remuneration.
Compliance is not mandatory, but companies are required to disclose their corporate governance practices and explain deviations from the code in their annual reports.
“The survey results demonstrate that while Singapore’s listed companies have made good progress, we are actually still quite far from compliance with the code,” said Associate Professor Lawrence Loh at the National University of Singapore Business School, which conducted the annual survey with CPA Australia.
“A quantum leap is needed in several critical areas, particularly in board independence. A clear encouragement is definitely necessary.”
Of the companies polled in the survey, which was conducted between July and October, 19.3 per cent had disclosed the exact remuneration of their chief executives, up from 7.8 per cent last year, but most still refused to do so, citing concerns over confidentiality or competition.
The proportion of companies with independent directors who had served for more than nine years increased from 37.2 per cent to 37.8 per cent, even though the revised code recommends a thorough review of the independence of such directors.