SGX to screen firms on compliance to Singapore’s governance code

Checking if they abide by the “comply or explain” requirement.

The local bourse builds up on its mission to raise the governance standards of its listed companies as it carries out a review of how they fare against the principles and guidelines of the Singapore Code of Corporate Governance (CG Code).

According to a statement by Singapore Exchange, under their listing rules, companies are required to comply with the code, or else explain deviations in their annual reports.

“Investors can then evaluate the adequacy of companies’ disclosures and whether explanations for any deviations are meaningful,” SGX said.

The screening will cover annual reports of over 550 companies released in the 12 months leading up to June 30, 2015.
SGX also intends to publicize the results of the screening and engage with relevant companies to address short-comings.

“The review will capture all aspects of the CG Code and focus on the areas specified in the SGX Disclosure Guidance document. Examples of key CG Code principles covered in the review include board composition, risk management and internal controls and disclosure on remuneration,” SGX said.

“Companies are under ever increasing scrutiny; those with good governance will build up reserves of shareholder trust and confidence which can be drawn upon should they become victims of negative research reports or short selling,” said Tan Boon Gin, SGX’s chief regulatory officer.

SGX will work will KPMG to carry out the 4-month review.