asean corporate governance scorecard country report for ...€¦ · top singapore companies 27...

ASEAN Corporate Governance Scorecard Country Report for Singapore 2018

3 April 2018

Dr Lawrence LohDirector

Centre for Governance, Institution & OrganisationsNUS Business School

Contents

Scorecard Initiative

Scorecard Structure

Key Trends and Findings

- Singapore’s Performance

Further Trends and Findings

- Selected Highlights in Relation to Board Diversity and Corporate Governance Review Drawing from ACGS Data

Top Singapore Companies

2

Scorecard Initiative

3

Scorecard Background

• ASEAN Corporate Governance Scorecard (ACGS) started in 2011

• 6 participating countries include Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam

• Underlying rationale

• Reflect global principles and internationally recognised good practices

• Universal and capable of being applied to different markets in ASEAN

• Robust quality assurance processes to ensure independence

4

Scorecard Implementation

• ASEAN Capital Market Forum Working Group • Comprises representatives from six countries• Currently coordinated by Securities and Exchange Commission Philippines

• SID and CGIO appointed by Monetary Authority of Singapore as domestic ranking body

• Scorecard enhancement• Scorecard revised in 2016• G20/OECD Principles of Corporate Governance used as main benchmark

5

Scorecard Structure

6

Scorecard Framework

7

LEVEL 1

LEVEL 2Bonus items reflecting other emerging good practicesPenalty items reflecting issues indicative of poor governance

Covers five areas:• Rights of Shareholders • Equitable Treatment of Shareholders • Role of Stakeholders • Disclosure and Transparency • Responsibilities of the Board

New Scorecard Methodology

8

Bonus

(+30)

Penalty

(-65)Disclosure and transparency (25)

Total Score Attainable(Max = 130 points)

Responsibilities of the board (40)

Level 1 Score (Max = 100 points)

Rights of shareholders (10)

Equitable treatment of shareholders (10)

Role of stakeholders (15)

Level 2 Score(Max = 30 points)

Bonus

(+30)

Penalty

(-65)

Scorecard Items

9

Part Number of Items

A – Rights of Shareholders 20

B – Equitable Treatment of Shareholders 15

C – Role of Stakeholders 13

D – Disclosure and Transparency 32

E – Responsibilities of the Board 65

Level 1 Total 145

Bonus 13

Penalty 25

Total 183

Note: 31 items (or 21%) out of the total 145 Level 1 items are given more weight based on the key areas to sharpen the focus.

Assessment Process

10

Shortlist:

100 largest companies by market capitalisation

Analyse :

100 companies using Scorecard

Peer review:

Top 35 Singapore companies by governance performance

Publish:

Companies by rank based on corporate governance scoresData Sourcesa. Annual reports for year ending between

1 April 2016 and 31 March 2017b. SGX announcements and media articles

between 1 August 2015 and 31 July 2017 c. REITs and Business Trusts were excluded

*

Key Trends and Findings

11

- Singapore’s Performance

Singapore Average Total Scores

12

55.67

71.68 70.7278.14 78.45

0

10

20

30

40

50

60

70

80

90

100

Ave

rage

To

tal S

core

2012 2013 2014 2015 2017

Note: 2016 was a gap year for revision and no assessment was conducted

Singapore Performance Over the Years

13

* Out of a maximum Level 1 score of 100 points

YearAverage

Total ScoreAverage

Level 1 Score*Total Score Range

Maximum Attainable Score

2012 55.7 56.4 37.9 - 81.7 117

2013 71.7 65.1 46.8 - 105.0 142

2014 70.7 67.0 43.9 - 105.5 128

2015 78.1 74.6 49.0 - 116.0 126

2017 78.5 73.7 46.4 - 120.0 130


Total Score Distribution Curve

14


13

23

36

22

12

1 21

11

27

23

1012 11

5

0

5

10

15

20

25

30

35

40

40.01-50.00 50.01-60.00 60.01-70.00 70.01-80.00 80.01-90.00 90.01-100.00 100.01-110.00 110.01-120.00

Nu

mb

er

of

Co

mp

anie

s

Total Score

2015

2017

Singapore Scores Breakdown Over the Years

5.1

11.7

3.8

14.1

21.8

5.8

11.4

4.5

17.4

26

6.5

11.9

5.1

17.3

26.1

7.4

12.7

5.7

19.1

29.7

7.99.2 9.8

18.1

28.5

0

5

10

15

20

25

30

35

Part A: Rights of Shareholders(10 points)

Part B: Equitable Treatment ofShareholders

(15 points for 2012-2015;10 points for 2017)

Part C: Role of Stakeholders(10 points for 2012-2015;

15 points for 2017)

Part D: Disclosure andTransparency (25 points)

Part E: Responsibilities of theBoard

(40 points)

2012 2013 2014 2015 2017

Sco

reca

rd R

evis

ion

Sco

reca

rd R

evis

ion

Sco

reca

rd R

evis

ion

Sco

reca

rd R

evis

ion

Sco

reca

rd R

evis

ion

15


Singapore Scores (Normalised) Breakdown Over the Years

5.1

7.85.7

14.1

21.8

5.87.6 6.8

17.4

26

6.57.9 7.7

17.3

26.1

7.48.5 8.6

19.1

29.7

7.99.2 9.8

18.1

28.5

0

5

10

15

20

25

30

35

Part A: Rights of Shareholders(10 points)

Part B: Equitable Treatment ofShareholders

(Normalised to 10 points)

Part C: Role of Stakeholders(Normalised to 15 points)

Part D: Disclosure andTransparency

(25 points)

Part E: Responsibilities of theBoard

(40 points)

2012 2013 2014 2015 2017

Sco

reca

rd R

evis

ion

Sco

reca

rd R

evis

ion

Sco

reca

rd R

evis

ion

Sco

reca

rd R

evis

ion

Sco

reca

rd R

evis

ion

16


6

51

22

56

27

91

0

10

20

30

40

50

60

70

80

90

100

Disclosing BoardAttendance at AGM

Disclosing DetailedAGM Voting Results

Nu

mb

er o

f C

om

pan

ies

2014 2015 2017

Selected Results by Sections

17

Part A - Rights of Shareholders

Part B - Equitable Treatment of Shareholders

27

53

27

6463

92

0

10

20

30

40

50

60

70

80

90

100

Directors to Abstainfrom Board Discussions

When Conflicted

Interested PersonTransactions

Conducted in Fair andAt Arm's Length

Nu

mb

er o

f C

om

pan

ies

2014 2015 2017

65 6370

0

10

20

30

40

50

60

70

80

90

100

Having a SeparateSection/Report on

Sustainability Reporting

Nu

mb

er o

f C

om

pan

ies

2014 2015 2017


Part C – Engagement with Stakeholders

Selected Results by Sections

18

Part D - Disclosure and Transparency

38

25

34

4550

81

0

10

20

30

40

50

60

70

80

90

100

Disclosing Dividend Policy Disclosing Corporate Objectives

Nu

mb

er o

f C

om

pan

ies

2014 2015 2017

Part E – Responsibilities of the Board

18

37

13

48

28

70

0

10

20

30

40

50

60

70

80

90

100

Disclosing Measurable Standards toAlign Performance-based

Remuneration with Company's Long-term Interests

Disclosing Detailed Fee Structure ofNon-executive Directors

2014 2015 2017


In Focus: Board Diversity Performance

19

Diversity Score from ACGS(Max 7 points)

Gender Diversity (Max 3 points)

1 Female Independent Director 2 points More than 1 Female Independent Director 3 points

Diversity Policy and Disclosure (Max 4 points)

- Policy- Disclosing measurable objectives - Reporting on progress in achieving its objectives

27

13

22

13

16

6

1 2

0

5

10

15

20

25

30

0 1 2 3 4 5 6 7

Nu

mb

er o

f C

om

pan

ies

Diversity Score

Further Trends and Findings

20

- Selected Highlights in Relation to Board Diversity

and Corporate Governance Review Drawing from ACGS Data

21

Source: Singapore Institute of Directors

Corporate Governance Council Recommendations

Board Diversity

Footnotes:1 Type of change: N=New or R=Review to an existing requirement2 Reference to the Listing Rule (LR) number in Annex G of Consultation Paper; Code

Provision in Annex C; Practice Guidance in Annex F; Consultation Question in Annex A3 MR=SGX Listing Rules (Mainboard); CR=SGX Listing Rules (Catalist)

Board Gender Representation in 100 Largest Singapore Companies

22

6.4% 6.8%7.4% 7.7%

10.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2012 2013 2014 2015 2017

Perc

enta

ge o

f Fe

mal

e D

irec

tors

Sources: 2012-2015 - CGIO and KornFerry; 2017 - ACGS Notes:

1. ACGS 2017 is based on annual reports with financial year end between April 2016 and March 2017.2. Diversity Action Committee’s announcement on 13 February 2018 revealed 13.1% of the board directorships of top 100

primary-listed companies are held by women as at 31 December 2017.

Independent Director Tenure and Gender Representation

7.6

6.76.0

4.2

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

0 1 2 3

Ave

rage

Ten

ure

of

Ind

epen

den

t D

irec

tors

Number of Female Independent Directors

23

Governance Performance and Gender Representation

24

73.77

81.67

68.00

70.00

72.00

74.00

76.00

78.00

80.00

82.00

84.00

Ave

rage

AC

GS

Tota

l Sc

ore

All-male

At Least 1 Female

76.93

71.19

84.94

78.99

60.00

65.00

70.00

75.00

80.00

85.00

90.00

No Long-termIndependent Director

At Least 1 Long-termIndependent Director

Ave

rage

AC

GS

Tota

l Sc

ore

Long-term Independent Directors (9 years)

All-male

At Least1 Female

Board Chairman and Gender Representation

25

9.9%

11.8%

11.3%11.2%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

Female Representation Among AllDirectors

Female Representation AmongIndependent Directors

Boards withIndependent Chairman

Boards with Non-independent Chairman


26


27

Ranking 2017 Company Name

Total Score 2017

1 Singapore Telecommunications Ltd 119.96

2 CapitaLand Ltd 116.44

3 DBS Group Holdings Ltd 115.73

4 Singapore Exchange Ltd 113.06

5 United Overseas Bank Ltd 112.24

asean corporate governance scorecard country report for ...€¦ · top singapore companies 27...

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