The Code of Corporate Governance issued by the Monetary Authority of Singapore and includes the basic guidelines and recommendations for listed companies. The conduct set forth in the Code is not mandatory, however, listed companies are required to disclose their specific corporate governance practices on an annual basis.
Our accountants in Singapore can help investors with various issues concerning corporate governance in terms of financial policies and practices.
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The Board of Directors in Singapore
Companies in Singapore should have a Board which will be the main body to control the company and the one that will ensure its long-term goals and success. The Board leads the company, sets the objectives and make sure that the company has the proper financial and human resources to remain competitive.
Among other functions of the Board, we can include management performance review, the establishment, and implementation of control policies as well as considering sustainability issues, primarily focusing on social and environmental issues.
As far as Board composition is concerned, the standard corporate governance guidelines stipulate that the Board should consist of independent directors that should account for at least half of the Board, especially when the Chairman and the CEO are one and the same person or when they are related family members.
Companies in Singapore are adopting board diversity objectives, mainly focused on including women directors on the Board and having a transparent and detailed policy for diversity.
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Company CEOs in Singapore
The corporate guidelines set forth by the Monetary Authority include a recommendation for a clear distinction between the individuals comprising the Board (those responsible for the leadership of the company) and the executives who are responsible for the managing of the company.
Ideally, no individual should be allowed to possess a significantly large percentage of power and control within the company. According to the same guidelines, the company Chairman and CEO should not be the same person. This is done in order to allow for a balance of power and for independent decisions regarding the company’s goals. Where the Chairman and the CEO are two different individuals, there should be a clear distinction between their responsibilities.
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