Strong corporate governance in Singapore starts with a skilled company secretary

Strong corporate governance in Singapore starts with a skilled company secretary banner

Strong corporate governance in Singapore starts with a skilled company secretary

In recent years, the COVID-19 pandemic has reshaped the corporate landscape of markets the world over. For businesses, survival has meant adapting to a new level of uncertainty and change. As we start to emerge from the pandemic stronger and better, Asia-Pacific businesses are pursuing corporate governance so that they will thrive while being in compliance with all applicable laws, rules and regulations.

Read on as Samatha Tai, Regional Managing Director, Corporate Secretarial, delves into the significance of corporate governance in Singapore, and explains how business executives can use values-driven governance approaches to ensure positive results. We will also examine the crucial role of the company secretary in guiding and managing contemporary corporate governance initiatives.

What is corporate governance?

Within an organisation, the meaning of corporate governance is to enhance performance, maintain operational integrity and maximise value for all stakeholders. Businesses that successfully meet corporate governance standards are better positioned to accomplish their objectives, secure investment and outshine competitors.

Furthermore, company-wide corporate governance can help mitigate the risk of misconduct, therefore protecting a business from penalisation.

“Under the Prevention of Corruption Act and related legislation, Singapore’s Corrupt Practices Investigation Bureau has the power to investigate corruption, money laundering and bribery, and take measures to deter and punish offenders,” Samantha says. “So businesses need to ensure they have suitable procedures in place.”

Samantha goes on to say, “While compliance with the Code of Corporate Governance is not mandatory in Singapore, its alignment with fiduciary duty makes it a vital investment for any leader. Fiduciary duty is taken very seriously. Regulators take swift action against directors – including independent directors – who fail to fulfil their duties.”

A successful corporate governance framework would include:

  • the creation of customised policies; and
  • company-wide compliance with those policies.

Stewardship of this function usually resides with the board of directors of a company, with the company secretary playing a critical ancillary role.

Corporate Governance

How company secretaries support good governance

Historically, the company secretary performed a largely administrative role. Today, the company secretary performs a vast range of important responsibilities in their capacity as a statutory officer. This includes serving as the nexus between the board of directors, senior management and stakeholders (including regulatory bodies).

Broadly, company secretaries support the board of directors and executive management with:

  • Board practices
  • Regulatory and legal compliance
  • Shareholder relations
  • Subsidiary management

They also assist with the adoption of digital technologies, such as board management and ESG software, to strengthen corporate governance while also improving board and shareholder processes.

Samantha explains that the current role of the company secretary is detailed in the Code of Corporate Governance.

“In Singapore, the advice of the company secretary on corporate governance issues is sought because they attend all board meetings, know the applicable policies and understand compliance obligations,” she says. “They are able to recommend corporate governance processes that need to be put in place. This could relate to board structure or the company’s policies and code of ethics, for example.”

A company secretary’s thorough knowledge of laws, rules and regulations means they can ensure corporate governance standards are complied with.

It is worth noting that the role of the company secretary in corporate governance has become so significant that the UK’s Institute of Company Secretaries and Australia’s Institute of Chartered Secretaries and Administrators have both rebranded to the ‘Chartered Governance Institute’ to reflect this.

Company secretary and boss

Ways to elevate your corporate governance

Good corporate governance is set to become increasingly important in the coming years. Regulators are highly likely to introduce new recommendations for both public and private entities. Companies that continue to meet best-practice standards as they expand will be in a strong position to seize new opportunities and respond to market demands.

By taking these four steps, you can lead your organisation towards exceptional corporate governance.

1. Appoint a skilled company secretary in Singapore

To begin, make sure your business complies with current regulatory rules and applies best practices, particularly those described in the Code of Corporate Governance (The Code). This also means adapting to meet new standards as they are introduced.

“The Code aims to promote high levels of corporate governance in Singapore by putting forth Principles of good corporate governance and Provisions with which companies are expected to comply”.

To satisfy this requirement, a qualified and experienced company secretary would assist with the establishment of a group-wide framework for corporate governance. The framework would include a code of conduct, as well as policies and procedures for corporate governance issues such as whistleblowing, anti-corruption, board diversity and sustainability.

Company secretaries help uphold corporate governance by:

    • Staying up to date with evolving standards
    • Ensuring compliance
    • Carrying out gap analyses
    • Advising on best practices

    Because of this, outsourcing your Company secretary is a popular choice for business leaders who wish to receive specialist advice that’s tailored for their organisation.

    2. Develop comprehensive, customised policies

    Due to Singapore’s demanding workloads at a senior level, companies can be tempted to resort to cookie-cutter solutions when creating their corporate governance policies.

    “But there is a whole lot more to corporate governance than just policy creation,” Samantha warns. “For corporate governance frameworks to work, you have to have intimate knowledge of the workings of your organisation and the mechanism of the Code of Corporate Governance.”

    Effective corporate governance policies:

    • are detailed and exhaustive;
    • reflect organisational values;
    • suit the organisation’s size and industry; and
    • explain how good governance is applied in practical contexts.

    3. Use integrated reporting

    While it is important that your corporate governance policies and reports are up to standard, good governance cannot be accomplished on paper alone. Samantha suggests that integrated reporting is likely to become mandatory in the years ahead.

    “Integrated reporting is a process founded on integrated thinking which espouses communicating how a company’s governance, strategy, performance and prospects can support value creation,” Samantha says. “It adds significance to your annual report.”

    Adopting integrated reporting allows for better employee and shareholder engagement, as well as enhanced value creation – two major benefits that are difficult to achieve when looking at reporting as a mere compliance exercise.

    All members of an organisation are responsible for pursuing good governance, so it is also important to demonstrate its value to board members and employees. You can do this by explaining how corporate governance practices are vital tools for improving company performance, rather than arbitrary obligations that must be fulfilled.

    “Effective corporate governance is embedded into the daily operations of a company,” Samantha says. “It’s not just a compliance policy.”

    Integrated reporting

    4. Embed and emphasise ESG in your organisational culture

    By aligning your company’s culture with its Environmental, Social and Governance (ESG) initiatives, you can help employees better understand the concept of corporate governance and their role in it.

    An external ESG professional can help you communicate key messages, maintain a timely ESG reporting schedule and ultimately build a constructive company culture.

    Due to the current world economic climate, many business leaders are so focused on navigating a challenging economy that they tend to neglect ESG matters.

    “But remember, the ‘social’ element of ESG is about your staff,” Samantha says. “At the end of the day, taking care of your people will impact your profitability positively.”

    To promote top-down corporate governance, regulators are now encouraging greater board involvement in ESG practices. Standards for these practices also continue to evolve on a country-specific basis.

    Keep in mind that board directors are ultimately responsible for mitigating ESG risks and making decisions that increase shareholder value. For this reason, it is critical that businesses establish an extensive ESG strategy that benefits all members of the organisation – including its shareholders and employees – and the environment.

    ESG Strategy

    Start implementing good governance practices today

    In summary, the effectiveness of your corporate governance practices will determine your business success in the years to come.

    As such, it is important that your board members and executive teams help drive the development and implementation of your governance framework. They should also be supported by a company secretary who shares their organisational values.

    A good company secretary is one that offers diverse knowledge, strong ethical guidance, sound judgement and excellent communication skills.

    Having a reliable company secretary managing your corporate governance also enables your executive staff to focus on other pressing business objectives, such as taking your company digital.

    Contact BoardRoom’s corporate secretarial experts to find out how we can help your business achieve its governance goals.

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    The advantages of meaningful ESG practices and sustainability reporting for businesses in Singapore

    Gain a competitive advantage through meaningful sustainability reporting Banner

    The advantages of meaningful ESG practices and sustainability reporting for businesses in Singapore

    Singapore recently raised its national climate target to achieve net zero emissions by 2050 – earlier than previously committed. In the announcement, the National Climate Change Secretariat urged the region’s public and private sectors to play their part in shaping a low-carbon future.

    The change comes as expectations for genuine environmental, social, and governance (ESG) action and corporate social responsibility continue to grow throughout the Asia-Pacific region and worldwide.

    In this article, we speak to Tina Thomas, Head of ESG for BoardRoom, about how businesses in Singapore can enhance their ESG performance in the eyes of stakeholders through high-quality sustainability reporting and by using ESG reporting frameworks.

    The importance of sustainability reporting in Singapore

    High expectations for responsible corporate practice in Singapore mean businesses are under pressure to demonstrate their commitment to ESG action. Companies can achieve this by publicly disclosing information about the sustainability outcomes achieved.

    Quality sustainability reporting helps private and public businesses to:

    Attract investment

    According to Enterprise Singapore, ESG must be prioritised to attain investments, as investors are now looking to ‘green’ their portfolios.

    “Investors want to know more about the risk profile of the companies they invest in,” explains Tina.

    ESG reporting allows you to demonstrate the strategies your business is using to respond to the challenges and opportunities affecting its sustainability – and the scope is broader than sustainability alone. Investors want to see how businesses operate with integrity and good social responsibility in accordance with reporting frameworks. For example, local community giving initiatives and ethical decision-making all play a role in shaping a low-carbon future. As a result, investors can have greater confidence in your potential for long-term value creation.

    Achieve robust regulatory compliance

    In an effort to support a sustainable economy and bring companies in line with global baseline reporting standards, Singapore’s regulatory system is escalating its requirements for ESG reporting. Businesses are under mounting pressure to disclose specific data that relates to the climate risks and opportunities most material (relevant) to them.

    “Regulators want companies to start pricing in the cost of externalities, including environmental pollution and biodiversity impacts,” says Tina.

    The law already requires some public-listed companies to produce sustainability reports. However, all Singaporean companies – public or private – can use sustainability reporting as a tool to elevate their reputation and protect their operational longevity.

    Improve brand value

    In a 2022 PWC survey, 32% of Singaporean consumers said they often or always consider governance factors when making purchasing decisions. 31% say the same about social factors. Forward-thinking businesses are tapping into this desire for responsible corporate practice by increasing the visibility of their ESG initiatives.

    “ESG has become a differentiator for businesses by adding to their brand value,” Tina says.

    Businesses should also recognise the potential for ESG reporting to build trust with employees, investors and business partners.

    “It can help you attract the right talent and customers, and tap into new market growth opportunities arising with the evolving ESG trend,” Tina adds.

    ESG Brand Value

    How do I showcase my ESG efforts?

    Any company can publish a statement about its commitment to ESG action. However, without hard data to back up its claims, it is unlikely to earn stakeholder trust.

    Key methods to broadcast the outcomes of your sustainability efforts include:

    Meeting or exceeding any regulatory reporting requirements or ESG frameworks that apply to your business (e.g. publishing your sustainability report in your annual report)
    Adding a sustainability statement to your website, ensuring it describes all the processes and initiatives you have in place
    Publishing case studies about ESG initiatives or projects you have actioned, with details provided about the targets you achieved against specific sustainability metrics

    Keep in mind that stakeholders, who are on alert for greenwashing, will heavily scrutinise your public ESG disclosures. To illustrate your integrity, demonstrate how your ESG efforts align with your company’s core values using evidence.

    What are the mandatory disclosures for ESG in Singapore?

    By 2025, public-listed companies in some major industries will be required by law to disclose their ESG management in line with recommendations by the Task Force on Climate-Related Financial Disclosures (TCFD). Listed companies outside the nominated industries will also be required to comply unless they can reasonably explain why they have taken an alternative course of action.

    To provide a starting point for this transition, the Singapore Exchange (SGX) has proposed a list of core ESG metrics companies can use for their reporting.

    “The core metrics are quantitative and applicable to most listed companies across various industries,” says Tina.

    Examples of these metrics include:

    Emissions, water management and waste generation
    Gender diversity, employment, development and training, and workplace safety and health
    Composition management, diversity, ethical behaviour, certifications and assurance

    While the core metrics offer commonality and consistency in what companies report, be aware that it is your responsibility to disclose the information most relevant to your business.

    Whilst ESG disclosures are not yet required for private companies in Singapore, ESG reporting must be a business priority if your company wants to remain competitive and be successful. ESG frameworks come in various forms, so it’s important to know what is relevant to your business.

    Which ESG reporting framework should I use?

    Whether you are a publicly listed or private company, to ensure your sustainability report carries weight in an increasingly global marketplace, we recommend adhering to globally recognised frameworks such as:

    As a publicly listed company, you must follow SGX guidelines first and foremost; however, some industries require more robust additional reporting. For privately listed companies that don’t need to follow the standards set by SGX, you may choose based on your industry, what your competitors are using, or emerging regulations.

    Do I need to conduct a materiality assessment?

    Impactful ESG action starts with understanding what matters to your business and your stakeholders, and where you can make the most difference. The need for familiarity with these factors makes conducting a materiality assessment critical.

    “A materiality assessment allows businesses to identify the key ESG metrics and factors relevant to them and present a risk or opportunity for the businesses,” explains Tina.

    “From there, they can decide what the next steps should be in terms of how they want to respond.”

    Materiality Assessment

    What are the common challenges of ESG reporting, standards, and frameworks?

    The main sustainability reporting challenges for businesses in Singapore include:

    1. Choosing disclosure topics

    According to Tina, companies often need clarification on which ESG data to include in their reports.

    “ESG reporting encompasses a big list of factors,” she says. “Depending on which framework you look at, there could be as many as a hundred topics you can disclose against.”

    The best framework for you will come down to various factors, such as your listing status, stakeholder expectations, size, industry, and geographical presence. After selecting your framework, conducting a materiality assessment will help identify which disclosure topics are most important for your business. Many Singaporean and multinational businesses engage with expert ESG reporting services for guidance on this matter.

    2. Collecting solid, timely data

    Manual tracking of sustainability efforts can be time-consuming and expensive, and the resulting data often lacks accuracy, consistency and depth.

    “ESG data – especially on environmental risks and impacts – can be very difficult to collect because it may fall outside the company’s immediate control,” Tina says. “It may also sit with different people, which makes collecting and combining the data in one place a slow, arduous task.”

    For many businesses, the solution lies in modernising the data collection process.

    “Technology can automate some of the processes around data management and also help streamline the process,” Tina adds.

    3. Setting relevant targets

    Even if you have collected good data on your ESG efforts, you may be unsure how to measure sustainability performance in a meaningful way.

    An ESG services provider will have a thorough understanding of ESG performance benchmarking in your industry and across the SGX, which means they can help you take steps to increase the effectiveness of your initiatives.

    They can recommend achievable yet compelling ESG targets to pursue according to relevant reporting frameworks and standards such as GRI, SASB, and so on.

    Relevant Targets

    Can I elevate my brand image through sustainability reporting?

    The best way to ensure that your sustainability reporting bolsters your reputation is by demonstrating how your ESG efforts create real change for local communities, whether your business is based in Singapore or elsewhere in the world.

    “Focus on communicating the positive impact you are having within your sphere of control,” Tina says. “This will eventually help to improve your reputation, brand image and consumer engagement.”

    For powerful reporting, you can also:

      Link ESG achievements back to your core brand values and the ESG issues your business is most passionate about
      Use macro indicators like the UN Sustainable Development Goals to measure the change you are stimulating on a micro level

      Enhance your sustainability reporting with BoardRoom Singapore

      BoardRoom’s ESG Access platform builds greater value into your sustainability reporting by automating your data collection, report production, and stakeholder engagement processes. Its evidence-based approach means you and your stakeholders can expect higher returns on investment in sustainability initiatives.

      With BoardRoom’s holistic approach to ESG, our services extend beyond reporting to advisory and assurance. From conducting a materiality assessment to identify which ESG issues and frameworks relate to your organisation to ensuring supply chain compliance with socially responsible business practices, we help transform your organisation into a more socially accepted, environmentally sustainable business with better risk management.

      Please contact our team in Singapore to find out more about our sustainability reporting services.

      Contact BoardRoom for more information:


      Tina Thomas

      Head of Environmental, Social and Governance

      E: [email protected]

      T: +65 6536 5355

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