OREANDA-NEWS. Corporate governance is relevant to investors.  As the term suggests, it relates to a system of principles, rules, practices and processes by which a listed company or trust is directed and controlled.  Essentially, corporate governance involves the balancing the interests of the various stakeholders in a company.  Corporate governance provides the framework for attaining a company’s objectives, it encompasses practically every sphere of management, from action plans, internal controls, risk management to performance measurement and corporate disclosure and transparency.  Thus, the Board of Directors and senior management are responsible for the overall governance of the company.

The Governance and Transparency Index (GTI) was launched by The Business Times and the Centre for Governance, Institutions and Organisations (CGIO) of NUS Business School, National University of Singapore. The GTI is divided into two components – governance and transparency, and garners information for these two components from company annual reports, corporate websites, investor relations information, company announcements on SGX, and media articles.

The governance component of the index covers board matters, remuneration matters, and accountability and audit matters, this component has a maximum score of 75. The transparency component focuses on how companies communicate with their shareholders and has a maximum score of 25. The GTI also has a bonus and penalty system, whereby companies that go beyond the requirements of the code will be awarded extra points, but companies that encounter negative events will be penalized.

According to a report released last week the average overall GTI score for Singapore-listed companies reached an all-time high of 47.6 points. The table below details the highest GTI scoring 50 stocks. Please note that clicking on a stock name will direct you to its relevant page on StockFacts.