Singapore Exchange Regulation Seeking to Enhance Corporate Governance Policies

The Singapore Exchange Regulation (SGX RegCo) is proposing a rule change to empower shareholders in calling special general meetings, as the city-state endeavors to enhance corporate governance practices, the bourse's regulatory arm said on Tuesday (Apr 23).

Currently, Singapore-listed firms have no regulatory obligation to respond to shareholder calls for special general meetings. Historically, domestic companies have been reluctant to grant such requests.

Under the proposed rule change, listed firms will be required to take certain action within 21 days to hold a meeting after a group of shareholders, or even one shareholder who owns at least a 10 per cent stake, makes a request. Any company that disputes the validity of the requisition notice must apply for a court ruling within the same timeline, SGX RegCo said. The public consultation is open until May 23.

"If investors have a stronger say, companies will be more motivated to consider their interests by improving both operational performance and shareholder returns," said Tan Boon Gin, CEO of SGX RegCo, adding that companies need to heed the market's requests.

Other exchanges, such as the one in the growing market of Hong Kong, have similar rules in place.

Singapore has been making constant efforts to improve corporate governance in the country after a recent surge in investor activism, both locally and among global firms. In January 2023, the bourse moved for better transparency in payment details for CEOs and individual company directors.

In addition to taking steps towards improving market discipline, the regulator is currently working on measures to ensure companies increase shareholder value. SGX RegCo is currently working on strengthening the boards of firms to enhance performance and reduce market friction, the CEO added.