New body to eye corporate governance standards in Singapore
A permanent committee in Singapore aims to uphold corporate governance standards and strengthen investor confidence by operating in an advisory and consultative capacity
A dedicated body has been created in Singapore to monitor corporate governance standards in the city-state. The Monetary Authority of Singapore (MAS) created the 18-member Corporate Governance Advisory Committee (CGAC) as an overseeing authority to keep a watchful eye on “corporate governance standards and practices".
The thinking behind the composition of the committee is to represent the interests of key stakeholders in Singapore.
"It will play an important role in levelling up corporate governance standards and practices and help to strengthen investors' confidence in our capital markets and uphold Singapore's reputation as a trusted international financial centre," MAS says about the body.
A key role of the committee is to act in an advisory capacity and flag up any future flashpoints on the horizon, partly by scanning international developments. The new body - which will be led by Bobby Chin, a board member of Singtel - stems from recommendations by the Corporate Governance Council (CG Council) after their in-depth review of the Code of Corporate Governance (CG Code) in 2018.
"The CGAC will identify current and potential risks to the quality of corporate governance in Singapore, and take a leading role in advocating good corporate governance practices. It will also monitor international trends, revise the Practice Guidance to clarify the CG Code, and recommend updates to the CG Code," MAS reveals.
Chin is convinced the new body will raise the bar in terms of corporate governance in Singapore, despite its lack of regulatory or enforcement powers, as reported in the Business Times
MAS says: "Singapore Exchange Regulation, the MAS, and the Accounting and Corporate Regulatory Authority remain responsible for taking regulatory actions against corporate governance-related breaches. The CGAC will work closely with these regulators to uphold corporate governance standards."
Though the formation of the CGAC has drawn praise from many quarters, including the inclusion of the former head of investment stewardship at Blackrock, some commentators have lamented the lack of overseas investor representation, especially considering Singapore’s role as an international financial hub. Others bemoaned the general lack of investor representation per se, given the need for robust investor protection.
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