SINGAPORE - Singaporean companies have fared well in a regional study of corporate governance, with four companies making the top 10.
The four firms were not named when the interim findings came out yesterday but will be disclosed when the full study is out at the end of the year. Its initial findings also show that Singapore companies occupy 19 of the top 50 spots.
The study, called the ASEAN Corporate Governance Scorecard, looks at how listed firms in Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam deal with issues such as shareholder rights, disclosure and transparency.
A Singapore country report placed Singapore Press Holdings in the top five, alongside DBS Group, OCBC, Singapore Exchange and SingTel. They each scored 70 per cent or more in the 142-point scoring system.
The top 50 companies in the ASEAN scorecard will be identified only in alphabetical order. Rankings will be introduced in future editions, said the Singapore Institute of Directors (SID), which helped with the study.
SID chairman Willie Cheng said the rankings will be an important development.
He said: "Companies should seek to understand the criteria and best practices embedded in the scorecard so that they can improve their corporate governance practices and rankings."
The study is part of an initiative by the ASEAN Capital Markets Forum and Asian Development Bank to assess the corporate governance practices of publicly listed companies.
Singapore companies were found to be strong in some areas. Most have independent directors comprising at least half of their boards, and whistle-blowing policies and procedures for staff are disclosed in most companies.
But the study found areas for improvement. While most companies here conduct annual board evaluations, many do not appear to conduct formal evaluations of chief executives and individual board members.
And few firms disclose how they select suppliers or contractors, despite the huge sums of money involved.
Monetary Authority of Singapore executive director Ng Yao Loong yesterday said good corporate governance underpins Singapore's development as an international financial centre.
"For corporate governance to be effective, boards cannot view it as a compliance and box-ticking exercise," he said at the event to launch the scorecard results.
To be forward-looking, directors need to work with management to ensure strategies and risks are clearly identified, he added.
Boards also have a responsibility to identify the right mix of management talent and build up a diverse management talent pool to help drive the company's long-term growth, he said. And they should also engage with investors regularly and facilitate the exercise of shareholder rights.
This article was published on April 5 in The Straits Times.
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