Author: Mak Yuen Teen

In a recent post, I asked why independent directors in Singapore are rarely held accountable, where I mentioned that Bursa Malaysia and other regulators in Malaysia seem to be more active in taking enforcement actions including against independent directors.

It’s time our regulators take a close look at the actions of directors when companies are caught in corporate governance scandals or failures and hold directors, including independent directors, accountable if they have failed to discharge their fiduciary duty and acted with the necessary skill, care or diligence. Otherwise, we will not see any significant improvement in corporate governance regardless of how strict our rules are.

We suggest that remuneration disclosure rules be aligned with IPT rules and therefore, like IPTs, any amount exceeding $100,000 paid to controlling shareholders, directors or their associates should be disclosed in exact dollar terms. Unlimited band disclosures also have no place in a disclosure-based regime.

The SGX CEO remuneration should have a strong link to number of companies with governance failures and have implementable clawback provisions. SGX Regco must have a prominent seat at the table when discussing whether a company is allowed to list and must be prepared to enforce.

Departure of three independent directors, allegations of breach of directors’ duties and a lack of clarity from the board are cause for concern.