Singapore, 3 August 2016 – Singtel has topped the rankings of the most well-governed and transparent companies under the Singapore Governance and Transparency Index (SGTI) 2016. The SGTI, an enhanced version of the Governance and Transparency Index, is jointly published annually by CPA Australia, NUS Business School’s Centre for Governance, Institutions and Organisations (CGIO) and Singapore Institute of Directors (SID), with The Business Times as the strategic media partner.
Singtel maintained its lead with a total score of 124 points and a six-point improvement from last year, thanks to its robust disclosure of board responsibilities, exact executive remuneration, as well as new sections of stakeholder engagement. This year marks Singtel’s sixth year at the top of the index, with the exception of 2013 and 2014.
DBS Group Holdings moved up two spots to second place this year as a result of its strong commitment to stakeholder engagement, including sustainability and community engagement matters.
Singapore Exchange and CapitaLand attained third and fourth positions respectively, each improving by four points on their SGTI scores. (Please refer to Annex 1 for a list of top 20 companies.)
Overall, the study found an improvement of 2.1 points from 2015 to 2016, with companies scoring a mean of 49.7 points compared to 47.6 points in 2015 (Annex 2). However, the increase has slowed from the average of four points per year from 2011 to 2015.
“It is in the interest of companies to have good corporate governance practices as these positively impact their performance and long-term viability. The SGTI, an enhanced index which incorporates leading international practices, will bring companies and corporate governance to the next level,” said Willie Cheng, Chairman of SID.
SGTI 2016 assessed and ranked 631 Singapore listed companies based on 2015 annual reports as well as other publicly available information released by 31 Dec 2015.
The enhanced index includes a new section on stakeholder engagement, containing questions addressing their rights. In addition, the revised SGTI questions were also updated based on guidelines from the Singapore Code of Corporate Governance 2012 and G20/OECD Principles of Corporate Governance.
In general, the top 20 companies ranked by the SGTI saw significant positive changes.
UOB (14th) made improvements in disclosure of board selection, director independence assessment, and board appraisal processes, and increased independence of its committees’ leadership. City Developments (10th) provided comprehensive disclosures on integrated sustainability practices, including anti-corruption policy and guidelines.
City Developments (+17 points), Global Logistic Properties (+15), UOB (+19), Vicom Limited (+15), and Wilmar International (+13) all moved up over 10 places in the ranking.
This year’s index also saw companies with less than S$500 million market capitalisation earning spots in the top 20. Tuan Sing and Sing Investments & Finance Limited, which have disclosed their AGM minutes on SGXNet and appointed independent chairmen, took seventh and 13th places respectively.
“Standards of corporate governance among Singapore-listed companies have continued to scale new heights every year since 2011. But, in comparing the best performers with the rest of the market, it is clear that much work lies ahead to bring those with weaker governance on this journey. Stakeholder expectations never stand still and embracing the highest standards of governance will need the close partnership of everyone involved – regulators, directors, management, investors, industry groups and professional bodies,” said Mr Melvin Yong, Singapore Country Head at CPA Australia.
Based on the SGTI, this year’s study saw 12 new questions covering various elements in the section of engagement of stakeholders regarding their policies and relevant activities.
On average, more than two-thirds of companies failed to disclose enough information on the various issues of stakeholder engagement. Specifically, just 12.5 per cent of companies revealed relevant data on the training and development programmes undergone by their employees. 16.5 per cent provided information on customers’ health and safety.
Similarly, there is much room for further improvement on the supplier/contractor selection practices with only 8.1 per cent disclosing the details.
From 2017, the corporate governance practices of Singapore Real Estate Investment Trusts (REITs) and Business Trusts will also be evaluated.
“Recognising the growing importance of REITs and Business Trusts in the capital market, we will study the feasibility of an index which will assess corporate governance practices and disclosures of REITs and Business Trusts next year,” said Associate Professor Lawrence Loh, Director of CGIO.
“A strengthened corporate governance assessment framework for Singapore means not only the augmented benchmarking but also the extended coverage of asset classes,” he added.
