Fostering
a Sound and Reputable Financial Centre
Enhancing
Corporate Governance Standards
The financial crisis
has highlighted the importance of risk management
oversight at the Board level and sparked increased
global discussions on the need for better corporate
governance practices. MAS has been closely monitoring
developments on this front and has proposed enhancements
to the existing corporate governance framework for
locallyincorporated banks, financial holding companies
and direct insurers. A consultation paper on MAS’
proposed enhancements was issued on 18 March 2010.
The proposals emphasise the important role played
by the Board in overseeing the soundness of their
financial institutions. The proposals also focus on
the need for directors to be equipped with the appropriate
skills and to be able to commit enough time to discharge
their responsibilities more effectively. In addition,
independent directors play an important role on the
Board by providing a check and balance on management
and majority shareholders, protecting the interests
of financial institutions as a whole. As such, the
proposed enhancements also touch on the criteria for
director independence, as well as changes to the minimum
proportion of independent directors on Board and Board
Committees.
MAS has also introduced
a requirement for real estate investment trusts (REITs)
to hold Annual General Meetings (AGMs) with effect
from 1 January 2010. Mandatory AGMs will enhance corporate
governance for REITs by providing an important channel
for communication between REIT managers and unitholders,
thereby increasing REIT managers’ accountability
to unitholders.
In February 2010,
MAS established the Corporate Governance Council to
promote a high standard of corporate governance for
companies listed in Singapore, so as to maintain investors’
confidence and enhance Singapore’s reputation
as a leading and trusted international financial centre.
The Council is chaired by Mr Alan Chan, Chief Executive
Officer, Singapore Press Holdings Limited, and comprises
members drawn from the business community and stakeholder
groups. Representatives from MAS, Accounting and Corporate
Regulatory Authority (ACRA) and Singapore Exchange
Limited (SGX) are appointed to the Council on an ex
officio basis. As an immediate task, the Corporate
Governance Council has commenced a review of the Singapore
Code of Corporate Governance. The Council will also
identify opportunities for continuing professional
development of directors and the development of practical
guidance for Board committees of listed companies.
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