SGX reviewing companies’ compliance with Corporate Governance Code
The review is part of SGX’s drive to raise governance standards of listed companies and follows the introduction of a Disclosure Guidance document in January 2015 to help companies comply with key aspects of governance.
Listed companies are required under SGX Listing Rules to comply with the CG Code, or explain deviations in their annual reports. Investors can then evaluate the adequacy of companies’ disclosures and whether explanations for any deviations are meaningful.
The review will cover annual reports of over 550 Mainboard companies released in the 12 months to 30 June 2015. SGX intends to make findings of the review public and engage with relevant companies to ensure short-comings identified are addressed.
The review will capture all aspects of the CG Code and focus on the areas specified in the SGX Disclosure Guidance document. Examples of key CG Code principles covered in the review include board composition, risk management and internal controls and disclosure on remuneration.
“A company’s approach to the Code of Corporate Governance principles speaks volumes about its commitment to business transparency and accountability to stakeholders. Companies are under ever increasing scrutiny; those with good governance will build up reserves of shareholder trust and confidence which can be drawn upon should they become victims of negative research reports or short selling,” said Tan Boon Gin, Chief Regulatory Officer of SGX.
SGX will work with KPMG which has been appointed to carry out the review of companies’ annual reports. The review is expected to take 4 months to complete.