Singapore Revises Code of Corporate Governance, Strengthening Rules Requiring Director Training

The Monetary Authority of Singapore (MAS) has released its conclusions on the draft revised Singapore Code of Corporate Governance, strengthening its rules regarding training of all directors, and requirementsforindependent directors.

The recommendations of the Singapore CG Council on the topic of director training, and MAS' response, are as follows:

C. Director Training

21 The Council recommended that companies should be responsible for arranging and funding the training of directors, and the Board should disclose in the Annual Report the induction, orientation and training provided to new and existing directors. In addition, the Council also recommended that the Nominating Committee (“NC”) should make recommendations to the Board on matters relating to the review of training and professional development programmes for the Board.

MAS Response

22 MAS accepts this recommendation.

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As a result, the relevant sections of the proposed revised Code of Corporate Governance will now read as follows with regard to the subject of director training (emphasis added by BDTI):

1.6 Incoming directors should receive comprehensive and tailored induction on joining the Board. This should include his duties as a director and how to discharge those duties, and an orientation program to ensure that they are familiar with the company's business and governance practices. The company should provide training for first-time director1 in areas such as accounting, legal and industry-specific knowledge as appropriate.

It is equally important that all directors should receive regular training, particularly on relevant new laws, regulations and changing commercial risks, from time to time.

The company should be responsible for arranging and funding the training of directors. The Board should also disclose in the company's Annual Report the induction, orientation and training provided to new and existing directors.

1 A first time director is a director who has no prior experience as a director of a listed company.

….

4.2 The NC [NominationsCommittee]should make recommendations to the Board on relevant matters relating to:
(a) the review of board succession plans for directors, in particular, the Chairman and for the CEO;
(b) the development of a process for evaluation of the performance of the Board, its board committees and directors;
(c) the review of training and professional development programs for the Board; and
(d) the appointment and re-appointment of directors (including alternate directors, if applicable).

DISCLOSURE OF CORPORATE GOVERNANCE ARRANGEMENTS

(An addendum that is not a formal part of the Code but rather a clarification or reminder)

The Listing Manual requires listed companies to describe in their company's Annual Reports their corporate governance practices with specific reference to the principles of the Code, as well as disclose and explain any deviation from any guideline of the Code. Companies should make a positive confirmation at the start of the corporate governance section of the company's Annual Report that they have adhered to the principles and guidelines of the Code, or specify each area of non-compliance. Many of these guidelines are recommendations for companies to disclose their corporate governance arrangements. For ease of reference, the specific principles and guidelines in the Code with express disclosure requirements are set out below:

 Delegation of authority, by the Board to any board committee, to make decisions on certain board matters (Guideline 1.3)

 The number of meetings of the Board and board committees held in the year, as well as the attendance of every board member at these meetings (Guideline 1.4)

 The type of material transactions that require board approval under guidelines (Guideline 1.5)

 The induction, orientation and training provided to new and existing directors (Guideline 1.6)

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MAS' Response to the Recommendations of the Singapore CG Council
(click Download Original Asset at lower right)
http://bdti.mastertree.jp/f/v15xqpam

Revised Corporate Goveranance Code (MAS – May 2, 2012)
(click Download Original Asset at lower right)
http://bdti.mastertree.jp/f/jkild8rc

The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.

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