Welcome to the Centre for Corporate Governance
Singapore is known for having established one of the more advanced corporate governance regime in the region. Recently, it came out top in Asia in a research report (that excludes Japan) released by Swiss banking group UBS for governance standards. Efforts by the regulators have not relented, and a new Corporate Governance Council has just been established with the mandate to “promote a high standard of corporate governance in companies listed in Singapore, so as to maintain investors' confidence and enhance Singapore’s reputation as a leading and trusted international financial centre”. Against this backdrop, The Center for Corporate Governance has been established with the objective of promoting dialogue amongst stakeholders and providing thought leadership on current and emerging issues.
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Governance after the financial crisis - Rethinking, Refining, Responding
The 2008 financial crisis has caused regulators, legislators, investors, the media and others to carefully examine and reassess the effectiveness of governance regimes around the world. Because the crisis originated in the United States, some observers have suggested that it represents a failure of U.S. governance practices. For this reason, regulators in some jurisdictions say they may no longer align their governance rules with U.S. practices and will instead reset their national governance frameworks along different principles.
Others, however, note that the governance practices of public companies and other entities with public accountability have significantly and steadily improved as a result of U.S. governance requirements. They believe that governance models in the U.S. and other countries remain fundamentally sound and are only in need of refinement, for example by introducing measures to improve organisations’ risk management practices.
What is the status of governance in Singapore? Recently, Deloitte Singapore invited governance leaders from Europe and North America to meet with their counterparts in Singapore to participate in a roundtable discussion. The conversation focused on governance in Singapore, its strengths, weaknesses and opportunities. The key thoughts raised by the panellists during their debate are summarised in this document.
Deloitte Singapore Hosts Corporate Governance Roundtable
On April 26 2010, Deloitte was privileged to host a roundtable gathering of luminaries from the diverse domains of business, academia and the non-profit sector. The closed-door discussion illuminated various issues surrounding corporate governance in Singapore and participants shared insightful opinions. Of the major themes that were looked at, the key role of directors kept surfacing. Click here to read more.
Out of the discussions, Deloitte and its strategic partners released a whitepaper on corporate governance entitled Governance after the financial crisis.
Deloitte launches Centre for Corporate Governance in Singapore
The Centre for Corporate Governance was successfully launched by Deloitte Singapore on 27 April 2010. More than 100 people attended this launch which was organized in partnership with INSEAD and with support from the Institute of Certified Public Accountants of Singapore, the Singapore Institute of Directors and Yale School of Management's Millstein Centre for Corporate Governance & Performance. Click here to read more.
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Opening remarks by Mr. Lim Hng Kiang at the SID’s Conference 2010
At the Singapore Institute of Directors (SID) Conference 2010 held on November 15, 2010, Minister for Trade and Industry and Deputy Chairman, MAS, Mr Lim Hng Kiang, spoke of the professional development for directors and how the SID can play a part in raising the local standards of corporate governance.
The transcript of his speech can be found on the MAS website > News > Policy Statements & Speeches > 2010 > 15 Nov 2010
ACGA Report on Independent Directors in Asia, August 2010
The Asian Corporate Governance Association (ACGA) has compiled a report regarding the rules in Asia on the number of independent directors that should sit on a listed company’s board. Over the past few years, a number of markets such as Thailand, Taiwan, Philippines and Korea have been amending their regulations and Codes of Corporate Governance leading to more transparent, and in some cases stricter, rules on the number of independent directors on boards. Also of note is the fact that in some jurisdictions, such as Singapore, Malaysia and Korea, banking acts set more stringent rules on the board composition of banks. Access the report from the ACGA website.
Asia Pacific economic outlook
Asia Pacific economic outlook, a Deloitte research report, provides near-term outlook for China, India, South Korea and Singapore.
ACGA Presentations for Member Briefings, Hong Kong & Singapore, May 2010
The Asian Corporate Governance Association (ACGA) recently conducted Members’ Briefings covering three topics of interests, namely “Asia Corporate Governance Roundup and Preview of CG Watch 2010”, “Asia Corporate Governance Roundup: Korea and Taiwan” and “Asia Corporate Governance Roundup: India”. In “Asia Corporate Governance Roundup and Preview of CG Watch 2010”, Jamie Allen, the Secretary General of ACGA, deliberated on, amongst other things, the improvements made in the recent past, and the present obstacles and issues encumbering further advancement in the standard of corporate governance in various jurisdictions including Hong Kong and Singapore.
Enhancing corporate governance: Proposed amendments to SGX rules
This newsletter provides the highlights from the proposed amendments to the SGX rules that were released in December 2009. The window period for submission of feedback is over, and it will be interesting to see whether the proposed amendments will be adopted in its present form or whether modifications or refinements will be made. Click here to view newsletter.
The Responsible and Sustainable Board
Regulatory requirements around environmental and social concerns are expected to increase and boards should understand how this affects their role as directors. Outlined in this article are key factors as to why corporate responsibility and sustainability social (CR&S) should be on the board’s radar, along with points to consider when addressing their company’s sustainability efforts. Click here to download a recent Deloitte report on the topic.
The corporate governance of listed companies – a manual for investors
2nd edition; published 2009 by the CFA Institute
The manual serves to alert investors to the primary corporate governance issues and risks affecting companies and to highlight some of the factors they should consider when making investment decisions. Although the primarily audiences are the investors, the manual does provide a perspective which boards will find useful in appreciating corporate governance issues that are important to investors. Download the manual.
RiskMetrics: MarketSnapshots
Published 2010 by RiskMetrics Group
Report published by the RiskMetrics Group that provides updates on legislative and regulatory developments in various markets globally, including Singapore. Download report.
Hot Topics
Enhanced Corporate Governance requirements for Banks, Financial Holding Companies and Direct Insurers
The MAS has published changes to the following regulations and guidelines to tighten the corporate governance framework for certain financial institutions on December 9, 2010:
- Banking (Corporate Governance) Regulations 2005;
- Insurance (Corporate Governance) Regulations 2005; and
- MAS Guidelines on Corporate Governance for Banks, Financial Holding Companies and Direct Insurers which are Incorporated in Singapore
Highlights of the key changes can be found in the December 2010 Financial Services Bulletin issued by Allen & Gledhill LLP.
Hitting the notes, but what’s the tune?
A new joint-report from the Association of Chartered Certified Accountants (ACCA) and Deloitte finds the growing complexity of rules and standards is at risk of seriously limiting the usefulness of narrative reporting. Hitting the notes, but what's the tune? collates the opinions of some 230 chief financial officers in listed companies across nine countries on the current challenges and future shape of narrative reporting in annual reports. More information can be found on the respective websites of Deloitte and ACCA.
CG Watch 2010
The Asian Corporate Governance Association (ACGA) has released the results of "CG Watch 2010", its fifth joint survey of corporate governance in Asia undertaken in collaboration with CLSA Asia-Pacific Markets. An excerpt of the report is available here. Titled "Stray not into perdition: Asia's CG momentum slows", 90 questions in five categories were asked: "CG Rules and Practices", "Enforcement", "Political and Regulatory Environment", "Accounting and Auditing Standards", and "CG Culture". Singapore regained the top spot, marginally improving on its score from the previous survey in 2007, while Hong Kong slipped to second. The full report can be purchased by non-members. Refer to the ACGA website for more details.
“The Value of Audit: Views from Audit Committee Chairmen” survey
A survey by the Association of Chartered Certified Accountants (ACCA), commissioned by the Accounting and Corporate Regulatory Authority (ACRA) has reaffirmed that external audit is extremely valuable to Audit Committee Chairmen, especially for the assurance it brings them and stakeholders of the company. Please refer to the press release for more information. The report, entitled “The Value of Audit: Views from Audit Committee Chairmen”, can be downloaded from the ACRA website.
Elsewhere in the region: Deloitte China Survey Shows Room for Improvement in Chinese Governance Practices
Working for effective corporate governance
In the wake of the financial crisis, many welcome a higher bar for corporate governance. Dr. Ernest Kan, President of ICPAS and Partner & Chief-of-Operations (Clients & Market), Deloitte Singapore, shared his perspectives on time commitment and independence of directors.
MAS proposed enhancements to the Corporate Governance framework
The Monetary Authority of Singapore (MAS) Corporate Governance (CG) Framework, which comprises regulations and guidelines for locally-incorporated banks, financial holding companies and direct insurers, was first implemented in 2007. Since then, there has been increased emphasis on effective corporate governance internationally. The recent financial crisis has further highlighted the importance of effective risk management oversight at the Board level. MAS intends to enhance the existing Framework, and has issued a consultation paper in that regard. Invitation for comments on the consultation paper has closed on 19 April 2010. Read more from the MAS website: Home> News> Press Releases> 2010.
OECD: Corporate Governance and the Financial Crisis (series)
The financial crisis has revealed severe shortcomings in corporate governance. When most needed, they often failed to provide the checks and balances that companies need in order to cultivate sound business practices. The Organisation for Economic Co-operation and Development (OECD) has published a series of three papers on this topic:
1. Corporate Governance Lessons from the Financial Crisis provides a first overview of the shortcomings in corporate governance surfaced by the financial crisis, and the resulting challenges. Download the report.
2. Corporate Governance and the Financial Crisis: Key Findings and Main Messages is the follow-up paper that examines in more depth and generality strengths and weaknesses in four key areas. Download the report.
3. Finally, the third report Conclusions and emerging good practices to enhance implementation of the Principles presents a set of conclusions and emerging good practices to help companies and governments to overcome recent weaknesses and support a more effective implementation of the OECD Principles on Corporate Governance. Download the report.
Independent Non-Executive Directors - A Search for True Independence in Asia
Board composition and independence are fundamental issues in corporate governance. Concentrated ownership structures and weak legal protection in Asia increase the importance of independent non-executive directors on corporate boards. In Asia, companies commonly have controlling shareholders who have the ability to control the nomination and election of directors to the board. This study examines ways to ensure that so-called independent directors are, in fact, independent. Four key areas are identified for discussion and improvement: director nomination and appointment, the concept of independence, director training and qualification, and the number of independent directors on the board. The study also includes a comparative analysis of the regulations and codes of corporate governance in Hong Kong, Singapore, India, and the Philippines. Download report.
Expect more frauds in hard times
Performing regular fraud risk assessments is the cornerstone of an effective fraud risk management programme. This article discusses how the economic crisis can lead to a rise in frauds, examples of how companies may manipulate their financial statements and actions companies can take to manage their exposure to financial fraud in a sluggish economy. Download Report.
Charity Council announces refinement of the Code of Governance for Charities and Institutes of a Public Character
The Charity Council will embark on an exercise to refine the Code of Governance for Charities and Institutions of a Public Character (IPCs), which was first introduced in November 2007.
The Charity Council has convened a Sub-Committee to oversee this refinement exercise. Three workgroups comprising various representatives from various charities and IPCs, grantmakers, professional bodies, academics and auditors have been formed to refine the various sections of the Code, as well as to develop guides and templates for use by charities. The Council aims to complete the exercise and publish the refined Code by the end of 2010.
Click here to view media release.
Dig Deeper
Corporate Governance Best Practices: One size does not fit all
While it is popular assumption that a more independent and engaged board is the universal remedy to ailing corporations, new research has revealed that the style of corporate governance should be associated to the relative position in the corporate life cycle, i.e. one size does not “fit all”. Read on to find out more.
Directors’ alert
Survival or success? 10 issues for 2010
This briefing discusses 10 key issues for boards and their organizations to address in the year ahead. Governance specialists from Deloitte member firms around the globe – Asia, Europe and the Americas – have provided their insights to create articles that discuss each of these ongoing boardroom priorities within the context of today’s challenging business environment. Download the report.
Ten Things for Boards of Directors to Avoid
Deloitte presents a list of 10 activities that should be avoided because they could hinder board and company effectiveness. Download report.
Key risk issues faced by directors
In this practical guide and toolkit to risk intelligence governance, Deloitte shares various “areas of focus” of risk governance, including a list of suggested actions; a sampling of questions to help trigger discussions among directors and with management; and a list of selected tools, proprietary to Deloitte, that we believe can facilitate the execution of your responsibilities as a fundamental part of your corporate oversight role. Download report.
Ethical conduct can be a market winner
Building an ethical culture is not just about complying with regulations – ethical businesses can be more successful than their competitors. This article discusses the importance of ethics to a business and how “tone at the top” can drive behaviour. Download report.
Managing Statutory Audits
This publication by Deloitte provides leading practices for corporate management in managing statutory audits, and corporate management can benefit from such managing such statutory requirements. Download report.