SINGAPORE: According to the recently released 2012 Governance and Transparency Index (GTI), disclosure practices by Singapore firms have improved over last four years as well as year-on-year, pushing the mean 2012 GTI score up from approximately 31.5 in 2011 to 34.9 this year. The GTI, a research project between the NUS Business School's Center for Governance, Institutions and Organizations (CGIO), CPA Australia and The Business Times, seeks to assess how Singapore-listed companies fare in terms of their corporate governance practices and disclosure as well as the timeliness and transparency of their financial results announcements. The project also aims to recognize those that surpass the requirements of the Code of Corporate Governance. This year, the GTI assessed 674 Singapore-listed companies based on their 2011 annual reports (ARs), corporate websites and announcements made between January 2010 and 2012. Companies' GTI base scores were accorded in relation to their performance on 1) board matters (maximum 35 points), 2) remuneration matters (maximum 20 points), 3) accountability and audit matters (maximum 20 points) and 4) transparency and investor relations (maximum 25 points). The base score is then adjusted according to the companies' bonuses and penalties, giving the overall GTI score. Even though the mean GTI score has improved over the last four years, only 24 or 4% of Singapore-listed companies scored 70 GTI points and above. A majority (68%) of companies scored between the 20 and 40 point bracket. The finance, multi-industry as well as transport, storage and communications (TSC) sectors performed the best in this year's GTI, placing many related firms in the top 25% percentile of the index. Many firms lost points due to 1) non-disclosure of director information, 2) executive reelection matters and 3) issues pertaining to the tenure of and share options of independent directors (IDs). However, on the bright side, 77% or 521 of companies have a whistleblowing policy in place, indicating a marked uptrend since 2009 (64%). Commenting on the report, Mr James Nuben, Head of Tax Division at Asiabiz Services, a Singapore company registration specialist, said, “Although adhering to the code is not compulsory at the moment, enterprises that have opted for Singapore company formation are reminded through the GTI that they too, will soon have to meet higher standards set by the revised Code of Corporate Governance that will take effect on November 1 this year." “It is not only the onus of financial institutions to demonstrate effective risk management. If every firm plays its part to improve its risk governance and disclosure practices, more investors will associate the Singapore brand with trust and high standards of governance and be more inclined to grow their money here," added Mr. Nuben.
