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.

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:

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.

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.”

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.

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.