SATS Ltd and Ascott Residence Trust retained top positions in their respective categories in the Singapore Governance and Transparency Index 2022
Singapore, 3 August 2022 – Singapore-listed companies and trusts have charted new heights in governance and transparency this year, a clear reflection of stronger performances in corporate governance and sustainability disclosures practices.
The 2022 Singapore Governance and Transparency Index (SGTI) posted improvements in mean scores for its two categories of listed entities.
In the General Category, the mean score rose to a high of 70.6 points, compared with 68.7 last year. This is the first time the score in this category has crossed the 70-point threshold since the inception of the index in 2009.
For the Real Estate Investment Trust (REIT) and Business Trust Category, the score increased marginally to 85.3 points in 2022 from 85.0 last year.
The SGTI is an annual study jointly conducted by CPA Australia, the National University of Singapore (NUS) Business School’s Centre for Governance and Sustainability (CGS) and the Singapore Institute of Directors (SID). The study evaluates Singapore Exchange-listed companies on their corporate governance practices as well as the timeliness, accessibility and transparency of their financial disclosures. In addition, the assessment framework has been continuously reviewed and updated to align with the latest leading practices in corporate governance.
Max Loh, Singapore Divisional President, CPA Australia said, “The positive trend in this year’s findings demonstrates the commendable efforts of companies in the journey for good governance and transparency. As businesses begin their recovery from the turbulence caused by the global pandemic, many new and emerging challenges are adding significant complexities to managing businesses. In this context, good leadership and governance – with a focus on accountability, transparency and sustainability – will remain the bedrock of long-term sustainable business performance.”
This year’s index ranked a total of 489 Singapore-listed companies in the General category, and 44 trusts in the REIT and Business Trust category. These companies and trusts released their annual reports by 31 May 2022.
In the General Category, SATS emerged top for the third year running. DBS Group Holdings improved significantly from its 10th position last year to rank second in 2022. Singtel took third place while City Developments Ltd, Singapore Exchange and UOB were in joint fourth position.
Companies fared better in disclosing stakeholder engagement practices, with their mean score in this metric rising three percentage points to 61 per cent. Similarly, average scores for performance in disclosure and transparency rose from 60 per cent in 2021 to 63 per cent in 2022. Disclosure of board responsibilities, upholding of shareholders’ rights, and practices related to accountability and audit all showed smaller improvements, with an increase of one percentage point compared to the previous year.
The top five trusts in the REIT and Business Trust Category in 2021 remained in the top five this year, with Ascott Residence Trust retaining top position. Ascendas REIT and Far East Hospitality Trust came in second and third respectively, followed by CapitaLand Integrated Commercial Trust and NetLink NBN Trust in fourth and fifth positions.
This year marks the sixth year of SGTI assessment for REITs and business trusts since the launch of this category in 2017. Their mean scores have shown marginal improvement since 2020, inching from 84.8 points in 2020 to 85.0 in 2021 and 85.3 in 2022. Mean bonus points for good disclosure practices increased from 18.5 points in 2021 to 19.2 in 2022. Mean penalty points for poor disclosure practices increased marginally by 0.3 points to reach 5.4 points in 2022.
Professor Lawrence Loh, Director of CGS, NUS Business School, said, “The improvement in corporate governance, as evidenced by the improving mean scores of the index, can be attributed to two main factors. First, the accountability required by companies on sustainability matters has spurred better corporate governance in recent years. Second, guidelines for corporate governance in Singapore is placing more emphasis on directors’ responsibilities and independence in matters relating to governance and transparency. The SGTI will continue to be an important benchmark for companies in Singapore to measure their performance in the areas of trust and credibility, particularly amongst investors and other key stakeholders.”
Wong Su-Yen, Chair of Singapore Institute of Directors, said, “It is heartening to see the improvements our companies have made despite the disruption to business-as-usual over the past two years. This is a reflection of the growing awareness of the importance of good corporate governance and a testament to the efforts of all the companies in the industry, not just those at the top, to improve their corporate governance practices in Singapore.”
Annex 1: SGTI Scoring Description Annex 2: SGTI 2022 General Category Top 10 Results Annex 3: SGTI 2022 REIT and Business Trust Category Top 5 Results Annex 4: SGTI General Category Mean Score Trend (2009 – 2022) Annex 5: SGTI REIT and Business Trust Category Mean Score Trend (2017 – 2022)
For media enquiries, please contact:
Kristy TEO Marketing and Communications Manager CPA Australia Tel: +65 6671 6527 Email: kristy.teo@cpaaustralia.com.au
ANG Hui Min Senior Manager, Corporate Communications NUS Business School National University of Singapore Tel: +65 6601 5857 Email: huimin19@nus.edu.sg
YANG Wai Wai Head, Communications and Research Singapore Institute of Directors Tel: +65 6011 0102 Email: waiwai.yang@sid.org.sg
About CPA Australia
CPA Australia is one of the largest professional accounting bodies in the world, with more than 170,800 members in over 100 countries and regions, including more than 8,600 members in Singapore. CPA Australia has been operating in Singapore since 1954 and opened our Singapore office in 1989. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
About the Centre for Governance and Sustainability
The Centre for Governance and Sustainability (CGS), formerly known as Centre for Governance, Organisations and Institutions (CGIO), was established by the National University of Singapore (NUS) Business School in 2010. It aims to spearhead relevant and high-impact research on governance and sustainability issues that are pertinent to Asia, including corporate governance, corporate sustainability, governance of family firms, state-linked companies, business groups, and institutions. CGS also organises events such as public lectures, industry roundtables, and academic conferences on topics related to governance.
NUS Business School is known for providing management thought leadership from an Asian perspective, enabling its students and corporate partners to leverage global knowledge and Asian insights.
The School is one of the 16 colleges, faculties and schools at NUS. A leading global university centred in Asia, NUS is Singapore’s flagship university which offers a global approach to education, research and entrepreneurship, with a focus on Asian perspectives and expertise. Its transformative education includes a broad-based curriculum underscored by multi-disciplinary courses and cross-faculty enrichment. Over 40,000 students from 100 countries enrich the community with their diverse social and cultural perspectives.
For more information, please visit bschool.nus.edu.sg, or go to the BIZBeat portal which showcases the School’s research.
About Singapore Institute of Directors
The Singapore Institute of Directors (SID) is the national association for company directors. Formed in 1998, it promotes the professional development of directors and corporate leaders. Its membership comprises directors and other professionals who have an interest in corporate governance. SID provides a comprehensive training curriculum that covers the spectrum of professional developmental needs of directors including thought leadership on corporate governance and directorship issues. It connects the director community via initiatives such as mentoring and networking, curates a one-stop information service on governance-related matters, and provides a range of services for boards. For more information, please visit the website and LinkedIn page.
Annex 1: SGTI Scoring Description
The Singapore Governance and Transparency Index (SGTI) evaluates companies on their corporate governance practices and disclosures, as well as the timeliness, accessibility and transparency of their financial results. Beginning 2017, Real Estate Investment Trusts (REITs) and Business Trusts have been assessed as well.
The SGTI is a joint initiative of CPA Australia, NUS Business School’s Centre for Governance and Sustainability (CGS), and Singapore Institute of Directors, supported by The Business Times.
The SGTI score has two components: the base score and the adjustment for bonuses and penalties. The base score for companies contains five pillars: board responsibilities (35 points), rights of shareholders (20 points), engagement of stakeholders (10 points), accountability and audit (10 points), and disclosure and transparency (25 points). The aggregate of bonuses and penalties is incorporated to the base score to arrive at the company’s SGTI total score.
The SGTI also evaluates REITs and Business Trusts on a similar criteria, but with added coverage on the unique nature of their operations. The base score for REITs and Business Trusts includes: questions in the base score for the SGTI (75 points) and additional questions in the base score for the SGTI for REITs and Business Trusts (25 points) that focus on structure, leverage, interested person transactions, competency of REIT manager / trustee-manager, and emoluments.
A total of 489 Singapore-listed companies and 44 REITs and Business Trusts which released their annual reports by 31 May 2022 were included for the SGTI 2022. The sources of information for SGTI assessment include annual reports, sustainability reports, websites, and announcements on the SGX website. Announcements made on the SGX website as well as in media coverage, which occurred between 1 January 2020 and 31 May 2022, have been used to update the scores.
Further information on the scoring methodology, including the full instrument, and past results may be obtained from CGS’s website at https://bschool.nus.edu.sg/CGS. Queries about the SGTI may be sent to cgs@nus.edu.sg. In order to maintain independence and fairness of the SGTI, reports or advice cannot be provided to individual companies.
Annex 2: SGTI 2022 General Category Top 10
Annex 3: SGTI 2022 REIT and Business Trust Category Top 5 Results
Annex 4 SGTI General Category Mean Score Trend (2009 – 2022)
Comparison of SGTI General Category 2022 and 2021 overall scores
Annex 5 SGTI REIT and Business Trust Category Mean Score Trend (2017 – 2022)
Comparison of SGTI REIT and Business Trust Category 2022 and 2021 overall scores
