Singapore-listed firms required to disclose exact payouts to CEOs, directors under new rules
And visit tonight all Singapore listed companies will soon need to disclose the exact amount and breakdown of salaries and other payments made to their directors and their chief executive officers the new rule takes effect for annual reports prepared for the financial years ending on or after the 31st of December 2024.
Now the regulatory arm of the Singapore exchange says this will help investors assess whether the directors and CEOs are appropriately incentivized salaries and bonuses are among the information that must be disclosed as well as benefits in kind and long-term incentives independent directives will also see their tenure limited to nine.
Years of the two-tier vote mechanism to retain independent directors who have served for more than nine years will also be removed with immediate effect the monetary authority of Singapore is revising the code of corporate governance to reflect the new rules for more on the new rules we are joined by Professor Lawrence Lowe director of.
The center for governance and sustainability at nus business school Prof thanks for joining us today but what do you make of the revised measures first of all I think if you look at the issues from a broader perspective I think it’s definitely very timely and critical timely because if you look at the environment now globally in terms of.
Economies we are facing slow down growth we are facing High inflation so there’s a lot of uncertainties being induced and critical meaning that now we are in an era where climate change is important sustainability will be a centerpiece for attention so so going forward good corporate governance will be a very important big rock for companies and I.
Think the measures now putting in this context will be definitely very timely and critical so you know the a is to you know help ensure accountability and transparency especially in Singapore’s Capital markets in what ways will this be carried out I think first of all if you look at say developments in global Capital markets many of these practices.
Particularly the disclosure of say salaries and pays for the leaders I mean these have already been practicing advanced economies for example us UK Australia and of course even Regional bosses like Hong Kong and Malaysia they are actually requiring some of these disclosures also I think what we are doing now is actually in alignment with.
Some of the key I would say parameters that stakeholders were want to see going forward so so I believe we definitely need to up the game in the face of investors they’re coming from Global Sources us so in Singapore is not you know alone in this but of course the Singapore companies are also not alone when they.
Have concerns that you know we’re having too much transparency is going to impact their competitiveness uh do the benefits you know sort of outweigh the cost I think first of all definitely it’s going to be a very delicate balance I I think we are drawing actually a very fine line between protecting some of the very sensitive or even sometimes confidential.
Information of companies but having said that I think it is good for us to take a bold step forward and you know enhance this very transparency that is going to be very very essential for stakeholders particularly the shareholders to base their decisions on so I think uh the the game is actually a bit sensitive but to be fair the market for talent is.
Something where it’s a bit I would say you will need all the players particularly even the intermediaries or Headhunters already know the figures so I mean for the CEOs for the directors I think if we draw a line to them I think it’s definitely quite I would say uh appropriate for our Market but Professor also something that came.
Up today is that the tenure of you know independent directors that’s going to also be limited to nine years so how will that impact succession planning and especially uh the issue of longevity for those Singapore listed companies yes I think if you look at the issue of longevity I’ll say precisely because of longevity we need a nine years like I.
Think it might be quite contrarian or even paradoxical but precisely because of this ability to refresh to revitalize the boss I think it will promote the Perpetual interest of the company because you have you know a flow of New Perspective new insights new practices that are up to you know date with key development so I think for companies uh.
It will actually not bring them down in favor go forward and I say I just want to say that you know we actually need mechanism to release the seeds on the boards of Directors for new people to come in I mean sometimes you see directors being as old as the furniture in the boardroom I don’t think it’s a good sign so I believe this would be a.
Good measure to ensure a very healthy throughput of new ideas all the time certainly refreshing and keeping things immune and also seeing that Singapore has quite a small talent pool to dip into for independent directors uh very quickly do you have any suggestions on how we can grow this I think you can actually unpack this.
Problem in the three parts one is if you look at the demand the supply and then the matching first first you look at the demand what we are seeing now is actually elevating the demand for new talent for leadership on the board in particular and I think it’s very very good but I think other suggestions I would say is to look at the supply of.
Directors I think we need some system where directors can actually uh you know Elevate their Readiness to serve on the boss and I think it’s very important that you know directors coming from all sources including diverse characteristics have to come in including even gender so guys I would say this is important and I think the.
Last point is the matching we need some ways to you know to make the demand and the supply meet and I think there will be some institutions organizations even like Singapore Institute of directors or even a educational institutions can come into play this matchmaking role yeah all right thank you so much for that Professor I’ve been speaking with.
Corporate govern on corporate governance and transparency with Professor Lawrence hello director of the center for governance and sustainability at nus Business School