Monetary Authority of Singapore Annual Report 2012/2013

A ROBUST FINANCIAL CENTRE

Enhancing Corporate Governance Standards

To enhance the corporate governance standards in listed companies, MAS accepted the recommendations of the Corporate Governance Council and issued the revised Code of Corporate Governance (Code) on 2 May 2012. The key changes to the Code were in the areas of director independence, board composition, director training, multiple directorships, alternate directors, remuneration practices and disclosures, risk management, as well as shareholder rights and roles. The revised Code took effect for listed companies in respect of annual reports for financial years commencing from 1 November 2012.

Following the issuance of the revised Code of Corporate Governance, the Corporate Governance Council released its Risk Governance Guidance for Listed Boards (Guidance) on 10 May 2012. The Guidance is intended to provide key information on risk governance to all Board members. This includes factors which the Board should collectively consider when overseeing the company’s risk management framework and policies, and the Board’s and Management’s respective responsibilities in managing the company’s risks.

MAS also sought to enhance corporate governance in banks by issuing MAS Notice 643 which details MAS’ requirements relating to banks’ transactions with their related parties. The requirements seek to minimise the risk of abuses arising from conflicts of interest, and to align banks’ procedures on related party transactions with international best practices. Among other things, MAS Notice 643 requires banks to ensure that every related party transaction is conducted free of conflicts of interest and on no more favourable terms than similar transactions with non-related parties under similar circumstances. Bank boards and management are also required to exercise adequate oversight and control over all related party transactions.