Opening Remarks by Mr Lim Tuang Lee, Assistant Managing Director (Capital Markets), Monetary Authority of Singapore, at the ASEAN Corporate Governance Scorecard Briefing 2021 for SGX-Listed Companies on 11 May 2021

Published Date: 11 May 2021 The Monetary Authority of Singapore

1     Mr John Lim, Past Chairman, Singapore Institute of Directors (“SID”),
Professor Lawrence Loh, Centre for Governance and Sustainability (“CGS”), NUS Business School,
Ladies and gentlemen, a very good morning to you.

2     Thank you for taking time to attend this briefing and for having me join you today.

3     I would first like to thank SID and CGS for your continuous partnership with MAS to enhance corporate governance (“CG”) practices in Singapore. The ASEAN Corporate Governance Scorecard (“ACGS”) is a key feature of this partnership. The consortium of SID-CGS has been Singapore’s Domestic Ranking Body for the ACGS assessment since 2013. It has played two key roles in improving CG practices. First, in assessing Singapore’s listed companies against the ACGS. Second, it is a peer reviewer of CG practices in other ASEAN jurisdictions.

4     I believe many of us gathered here today see the value of good corporate governance, whether as a Board member or senior management of a company, an investor or a stakeholder. One key question we might ask ourselves is how does one measure corporate governance or know if a company’s practices are adequate? The ACGS is one such tool to facilitate this discovery. It was developed using global principles and internationally recognised good practices such as the G20/OECD Principles of Corporate Governance. The ACGS can play a useful role in promoting good corporate governance, spurring discussion on the practices that are best suited for a company, and this can create value for both companies and investors.  Let me outline three key points:

    (i) First, the scorecard provides a systematic framework to identify areas where companies have done well, as well as where improvements can be made. Companies can also evaluate their states of progress by comparing their scores over time. In addition, they would be able to benchmark where they stand relative to peers, and learn from others’ good practices;

    (ii) Second, the ACGS offers investors insights into corporate governance practices across companies in ASEAN. The scores are available on the websites of the ASEAN Capital Markets Forum (“ACMF”) [1] , SGX and other ASEAN regulators. Investors can use the information to identify companies that have demonstrated good corporate governance practices when making their investment decisions. Interestingly, preliminary findings from a research supported by the ACMF [2] suggest that a better ACGS score is associated with better financial outcomes in the form of improved returns on equity and better stock market performance; and

    (iii) Finally, a positive ACGS assessment can attract investments in the company and facilitate fund raising efforts by bolstering investor confidence, particularly from global or long-term investors.

5     I am glad to see companies in Singapore doing better in their ACGS scores over the years and encourage our companies to continue making improvement. From the review undertaken by the SID-CGS, one key area that companies can look to doing better, is in how they communicate with stakeholders. Besides adopting good corporate governance practices, it is also important for companies, to keep stakeholders informed on what they have done or committed to do. Mr John Lim and Professor Loh will be sharing more about enhancing disclosure as well as other areas for improvement that companies should consider.

6     I would also like to share that the Corporate Governance Advisory Committee (“CGAC”) [3] is commissioning a survey to assess how Singapore-listed companies have implemented the provisions of the CG Code, which was last revised in 2018. This presents another opportunity for companies to identify areas where they could further improve their corporate governance practices and disclosures. MAS will work together with the CGAC to study the findings and partner the industry to uplift corporate governance standards in Singapore.

7     As we look to emerge from our current challenging business environment due to the pandemic, I would like to encourage board members and senior leaders to take the opportunity to strengthen corporate governance practices, and in doing so, position your companies well for the recovery ahead.

8     I wish you a fruitful discussion.

9     Thank you.