In a speech delivered earlier this month, Chia Der Jiun, Managing Director of the Monetary Authority of Singapore (MAS), urged boards of listed companies to take a more active role in effecting sound corporate governance, driving shareholder value creation, and strengthening Singapore’s equity market.
Der Jiun said policymakers had already put in place measures to support the market, but emphasized that companies must now play their part by delivering clear strategies for growth and communicating effectively with investors. A key aspect of this will be ensuring that companies are “grounded” in strong governance practices, Der Jiun argued. He highlighted research showing that firms that both implement and disclose strong corporate governance practices tend to achieve stronger valuations.
Der Jiun explained that MAS is undertaking a review of the Code of Corporate Governance to uplift expectations and norms for value creation and investor engagement. This review is being conducted in partnership with the SGX and the Corporate Governance Advisory Committee. “The Code review will also look to enhance provisions relating to corporate culture, board effectiveness and risk management,” Der Jiun said. “An enhanced Code will help equip boards to better steward long-term shareholder value and build deeper investor confidence.”
Additionally, MAS is seeking to enhance mandatory disclosures to foster greater shareholder communication. However, such disclosures are on their own insufficient for driving lasting transformation, Chia acknowledged. “It carries the risk of being a box ticking exercise, if there is no real ownership by company leadership, with no sustainable or meaningful benefit for investors or the company,” he said.
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