Board diversity recognised in inaugural awards at ASEAN Corporate Governance Scorecard (Singapore results) 2018

Timely launch of new book featuring personal directorship journeys of women 

A total of six awards were presented at the 2018 ASEAN Corporate Governance Scorecard Singapore rankings where Singapore Telecommunications (Singtel) received the Top Achiever accolade.

The Singapore country report of the ASEAN Scorecard 2018 revealed overall progress by the top 100 Singapore publicly-listed companies, with Singtel retaining its top spot since 2013.

Singtel, DBS Group Holdings and Singapore Exchange each received honours for board diversity in the Scorecard assessment and rankings, in the inaugural awards presentation. Board diversity is one of the vital board composition components the Scorecard assesses. Among the criteria, companies are considered diverse if they have female independent directors and have disclosed a detailed board diversity policy.

United Overseas Bank and Olam International won the Outstanding Progress award for most improved performance as both companies moved up 22 spots and 35 spots respectively, to break through to the top 10 rankings for the first time.

The results are based on Singapore companies’ performance as assessed in 2017. Please refer to Appendix 1 for the top 10 rankings.

The Singapore Institute of Directors (SID) and the Centre for Governance, Institutions and Organisations (CGIO) of the National University of Singapore (NUS) Business School are the joint domestic ranking body for the ASEAN Scorecard, appointed by the Monetary Authority of Singapore (MAS).

Good corporate governance

Associate Professor Lawrence Loh, Director of CGIO, NUS Business School said, “Companies need to continuously uphold good corporate governance practices to stay relevant in the investment landscape. While Singapore companies have progressed notably well in the Scorecard, there are two worrying trends in corporate governance performance observed.”

“First, there is a widening gap between better performing big-capitalisation companies from the rest where the size effect amounts to 20.9 per cent of the scores. Second, there is also a widening gap between the Temasek-linked companies vis-à-vis the other companies whereby the Temasek premium is 38.8 per cent.”

More to be done in disclosing diversity policies

While over one third of the 100 publicly-listed companies had provided a board diversity policy, companies need to focus more in areas of appointing more female independent directors and disclosing detailed board diversity policy.

Mr Willie Cheng, Chairman of SID, said: “A key aspect of good corporate governance is board diversity. It avoids groupthink and uncritical conformity. There are many dimensions of diversity: age, skills, industry, nationalities, etc. However, with the disproportionate representation of women on board, gender diversity is understandably being emphasised.”

“With that in mind, we thought it appropriate to also launch at this event, the book, Women on Board: Making a Real Difference. This book is SID’s latest initiative to support and promote greater gender diversity on Singapore boards,” he added.

Gender diversity in the boardroom

The book Women on Board: Making a Real Difference features 24 women directors on the boards of Singapore’s biggest companies and nonprofit organisations, ranging from veterans to newcomers, in a range of industries.

Among the personalities are Ms Lim Hwee Hua (Director, United Overseas Bank), Ms Euleen Goh (Chair, SATS) and Ms Teo Swee Lian (Director, Singapore Telecommunications), who provide snapshots of boardroom gender diversity through their personal stories of their directorship journeys and contributions to corporate governance.

Women on Board: Making a Real Difference is a collaboration between SID and BoardAgender with the support of Accenture. Please refer to Appendix 2 for more information.

APPENDIX 1: ASEAN Corporate Governance Scorecard – Country Report for Singapore 2018

ASEAN Corporate Governance Scorecard

The ASEAN Corporate Governance Scorecard is a joint initiative of the ASEAN Capital Markets Forum and the Asian Development Bank. Since 2011, the Scorecard assesses the corporate governance of the 100 largest publicly-listed companies by market capitalisation in each of the six participating countries in ASEAN. The participating countries are Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The Scorecard is primarily based on the Organisation for Economic Co-operation and Development (OECD)’s principles of corporate governance. Companies are assessed and scored in five major areas, namely rights of shareholders, equitable treatment of shareholders, role of stakeholders, disclosure and transparency and responsibilities of the Board. There is also an added bonus and penalty section.

In 2016, the Scorecard was reviewed to incorporate G20/OECD Principles of Corporate Governance that were issued in November 2015. The revisions strengthened the robustness of the Scorecard framework, taking into consideration investors’ expectations and developments in business and corporate governance practices.

2018 Singapore country report

In Singapore, the Singapore Institute of Directors (SID) and National University of Singapore (NUS) Business School’s Centre for Governance, Institutions and Organisations (CGIO) have been appointed by Monetary Authority of Singapore (MAS) as the joint domestic ranking body to conduct the ranking exercise for Singapore listed companies.

The 2018 Singapore country report is based on companies’ financial year between 1 April 2016 and 31 March 2017.

Table 1: Top 10 Singapore listed companies in the 2018 Singapore country report, ASEAN Corporate Governance Scorecard

Overall improvement

The average score was 78.45 points based on 2017 performance, compared to 78.14 points in 2015, a slight uptick in overall performance.

Figure 1: Singapore Companies’ Average Scores (2012 – 2017)

There were improvements in three of the five areas of evaluation, namely rights of shareholders, equitable treatment of shareholders and role of stakeholders.

Table 2: Ranking Criteria of ASEAN Corporate Governance Scorecard

Overall, Singapore companies made progress in several areas in the latest 2018 rankings. The top four findings are:

1. More companies disclosed their detailed Annual General Meeting (AGM) voting results, with 91 per cent of the companies providing breakdown of voting results in 2017 compared to 56 per cent in 2015.
2. 50 per cent of all companies in 2017 disclosed the company dividend policy, as compared to 34 per cent in 2015.
3. 27 per cent of companies disclosed board attendance at their AGMs, an increase of 5 per cent from 2015.
4. Only 28 per cent of the companies provided their remuneration policy, an improvement from 13 per cent in 2015.

These are some of the areas which are addressed in the ongoing review of the Code of Corporate Governance.

Increased emphasis and improvements for board diversity

One of the new features of the revised Scorecard is the increased emphasis on board diversity. The board diversity criteria cover both disclosing a detailed diversity policy and having female independent directors on board.

1. 37 per cent of the 100 Singapore publicly-listed companies provided a detailed policy including measurable objectives.
2. 11 per cent of the companies have more than one female independent director on board.
3. Only four companies reported on the progress of achieving their board diversity objectives and targets.

For more information on the Singapore results of the ASEAN Corporate Governance Scorecard, please visit CGIO’s Reports and Publications.

APPENDIX 2: Women on Board: Making a Real Difference

A diverse range of talents and professions are highlighted in the book Women on Board: Making a Real Difference. A former cabinet Minister, ex-central banker, pioneering venture capitalist and path-breaking medical practitioner are among the 24 women featured.

Focusing on gender diversity in the corporate boardroom and nonprofit world, the book debunks the notion that there is a dearth of professional female talent ready to make a real difference in the boardroom. The SID publication is a collaboration with BoardAgender and supported by Accenture.

The accomplishments and personal directorship journeys of the women are presented through common boardroom themes, such as the digital economy, sustainability, risk management, and real estate investment trusts. The women who feature in the book are (in order of appearance):