Corporate Governance

Singapore leads the way: Key messages from Corporate Governance Week 2019

Did you attend any of this year’s Corporate Governance Week events in Singapore? The Securities Investors Association (Singapore) (SIAS) has run the event since 2010, making 2019’s event the 10th instalment of the annual gala.

SIAS is a charity and an Institution of Public Character (IPC). It’s Asia’s largest investor group, with more than 70,000 members. It has four goals:

  • Advocate for sustainable and stable stakeholder relationships in the investment community.
  • Safeguard and protect investor rights in Singapore.
  • Empower investors through education and timely information.
  • Promote fair and transparent corporate governance standards, regulations and practices.

Corporate Governance Week plays a crucial role in achieving these goals. This year’s event ran from 23 September to 1 October 2019 and included a conference, gala dinner and presentation ceremony, forums, a charity governance conference, and workshops.

Understanding the culture and governance, understanding retail shareholders, building trust through culture reporting and the corporate treasure’s role.

Companies must take a long-term approach to governance

Mr Ong Ye Kung, Singapore’s Minister for Education, gave the opening address on Monday morning to launch the event. He spoke on companies’ need for a long-term approach to governance, focusing on risk management and technological advances.

“How we enact and enforce rules and regulations are becoming more and more important, but just becoming a stronger and better culture for corporate governance,” he said.

“Rule-makers and enforcers, like companies, so need to take a long-term view.”

Mr Ong rule-making:

  • Neutrality: rules must be technologically neutral so they can take into account new technologies that disrupt industries and markets.
  • Differentiation: rules must be differentiated according to the relevant activities ‘and entities’ risk profiles.
  • Review: the approach to rule-setting and review must be appropriate to the times.

Further, he noted that there are two approaches to rulemaking: prescriptive, which addresses specific complexities, industries and activities; and principle-based, which describe desired goals and outcomes without specifying how to achieve them.

Both are relevant – and necessary – in different situations, and the Singapore Code of Corporate Governance has been streamlined in 2018 to make it more principle-based.

Culture is critical

Regardless of what types of rules your company institutes, and what types of rules it complies with, is the key to success. Boards of directors must have secure, mobile, ‘anywhere, anytime’ access to company information and they need robust tools to manage such as voting, committee reports, collaboration, recruiting and overseeing company strategy.

Modern Governance is an approach that involves deploying a unified technology platform that provides these functions and more. Critically, modern governance platforms include data analytics so they can proactively discover insights that want to improve decision-making, reveal strengths and weaknesses in company culture, uncover new business opportunities and more.

It is created throughout the organization. Even the best technologies in the world can not be overcome, and that is not focused on legal compliance, high-quality outcomes and customer satisfaction; but a modern governance platform can help ensure compliance with prescriptive and principle-based rules.

Technology, governance and investors

The event’s first presentation was ‘Technology & Governance – Can Blockchain and AI Technology Be Leveraged for Corporate Governance’. Professor Erik Vermeulen of Tilburg University in the Netherlands discussed the use of distributed ledger technology in real-time.

The next two sessions shared similar themes. Janet Wong, Stewardship & EGS Engagement Officer at Hermes Investment Management, delivered ‘The Future of Shareholder Commitment – How is Technology Evolving Shareholder Engagement’.

They are addressing the impact of blockchain on financial markets, equity financing, debt market financing, shareholder engagement and more; questioned how companies can use technology to ensure effective governance in the interests of all shareholders; and explored the evolution of the AGM.

Mr Sushil Nair, Deputy CEO & Co-Head, Corporate Restructuring & Workouts / Indonesia Group at Drew & Napier LLC entitled ‘Corporate Debt Restructuring & Investor Protection – How is Singapore Advancing to Asia’s Hub for Restructuring? ‘. Mr Nair discussed the Impact of the Singapore Companies Act and its Enhanced Section 211B, and the territory’s attempt to create a new regime that would attract creditors and debtors for restructuring.

Singapore to the fore

Corporate Governance Week is an event not to be missed. This year’s edition showscased the forward thinking that has come to characterize Singapore, its government and its companies. By adopting strong governance tools, embracing technology and keeping firmly in mind when making decisions, the territory can make a strong claim to being the world’s leader in compliance, culture and good governance.

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