Majority of small and mid caps riddled with corporate governance loopholes

Investor relations efforts leave much to be desired.

Exemplary corporate governance is little more than a faraway dream for most small and mid caps. A study by the Securities Investors Association (Singapore) showed that majority of listed SMEs are riddled with corporate governance loopholes.

For instance, a staggering 78.0% of the assessed companies did not have a single independent director who possessed industry experience.

Further, 60.7% of the assessed companies failed to provide the contact information of their investor relations personnel on their annual reports or websites.

For 65.2% of the assessed companies, a substantial shareholder who is unrelated to the board, management or other substantial shareholders could not be found over the 3 year assessment period.

“Many retail investors are invested in medium and small caps, which represent 80% of the companies listed on SGX. Past experience shows that corporate governance failures occur mainly amongst SMEs,” said David Gerald, President and CEO, SIAS.