'Compliance adviser' to protect investors?

Mr David Gerald (left), president and chief executive of the Securities Investors Association (Singapore), presenting a token of appreciation to Minister in the Prime Minister's Office Chan Chun Sing, who was guest of honour at the 16th Investors' Ch
Mr David Gerald (left), president and chief executive of the Securities Investors Association (Singapore), presenting a token of appreciation to Minister in the Prime Minister's Office Chan Chun Sing, who was guest of honour at the 16th Investors' Choice Awards last evening.ST PHOTO: NEO XIAOBIN
(From left) Mr Gautam Banerjee, chairman of Blackstone Singapore and the selection committee for the Singapore Corporate Governance awards category; Mrs Lim Hwee Hua, Sias chairman; DBS Group Holdings chairman Peter Seah, with the Singapore Corporate
(From left) Mr Gautam Banerjee, chairman of Blackstone Singapore and the selection committee for the Singapore Corporate Governance awards category; Mrs Lim Hwee Hua, Sias chairman; DBS Group Holdings chairman Peter Seah, with the Singapore Corporate Governance-Diversity award; and Minister in the Prime Minister’s Office Chan Chun Sing at the award ceremony last night.ST PHOTO: NEO XIAOBIN

Sias chief suggests this for newly listed firms, and a split in SGX's profit and regulatory roles

The head of a shareholder advocacy group has proposed several ideas to boost investor protection here, including the role of a "compliance adviser".

New companies listing on the Singapore Exchange (SGX) mainboard should perhaps have to engage such an adviser for a period of at least two annual general meetings, said Mr David Gerald, the president and chief executive of the Securities Investors Association (Singapore), or Sias.

He said the adviser could help boards familiarise themselves with market requirements on governance, risk management and internal controls.

  • The winners

  • SINGAPORE CORPORATE GOVERNANCE: BIG CAP

    Winner: DBS Group Holdings

    Runner-up: Keppel Corp

    Runner-up: OCBC

    MID AND SMALL CAP

    Winner: AusGroup

    Runner-up: Cordlife Group

    Runner-up: Gaylin Holdings

    Runner-up: Tuan Sing Holdings

    REITS & BUSINESS TRUSTS

    Winner: CapitaLand Mall Trust

    Runner-up: Ascendas Reit

    Runner-up: Frasers Com Trust

    Runner-up: Mapletree Com Trust

    MOST IMPROVED

    Winner: Casa Holdings

    DIVERSITY

    DBS Group Holdings

    Neptune Orient Lines

    Sats

    Singapore Airlines

    Singtel

    BEST RETAIL BROKER

    Winner: CIMB Securities (S) Runners-up : Maybank Kim Eng Securities and Phillip Securities

    Merit: OCBC Securities

    INTERNAL AUDIT EXCELLENCE

    Winner: SMRT Corporation

    Runners-up: Frasers Centrepoint, Keppel Corp

    Special recognition: Ms Tan Eng Hwa, general manager (group internal audit), Keppel Corp

    MOST TRANSPARENT COMPANY: OIL & GAS

    Winner: Sembcorp Industries

    Runner-up: China Aviation Oil (S) Runner-up: Ezion Holdings

    CHEMICALS & RESOURCES

    Winner: Midas Holdings

    Runner-up: Geo Energy

    CONSTRUCTION & MATERIALS

    Winner: Yoma Strategic Runner-up: Koh Brothers Runner-up: OKP Holdings

    INDUSTRIALS

    Winner: Neptune Orient Lines

    Runner-up: Far East Group

    Runner-up: Venture Corp

    FOOD & BEVERAGES

    Winner: Super Group

    Runner-up: Qian Hu

    FINANCE

    Winner: DBS Group Holdings

    Runner-up: OCBC

    Runner-up: SGX

    RETAIL & HOUSEHOLD GOODS

    Winner: Courts Asia

    Runner-up: Old Chang Kee

    Runner-up: OSIM International

    SERVICES

    Winner: StarHub

    Runner-up: IHH Healthcare

    Runner-up: SPH

    TRAVEL, LEISURE, AUTOMOBILES & PARTS

    Winner: ComfortDelGro

    Runner-up: Banyan Tree Runner-up: OUE

    REAL ESTATE

    Winner: City Developments

    Runner-up: Frasers Centrepoint

    Runner-up: GLP

    REITS & BUSINESS TRUSTS

    Winner: Ascendas Reit

    Runner-up: CapitaLand Mall Trust

    Runner-up: Keppel REIT

    TECHNOLOGY

    Winner: Serial System

    Runner-up: Aztech Group

    Runner-up: TeleChoice

    CATALIST

    Winner: Neo Group

    Runner-up: Far East Group

    Runner-up: MegaChem

    MAINBOARD SMALL CAPS

    Winner: Soilbuild Construction Runner-up: Micro-Mechanics

    Runner-up: OKP Holdings

    NEW ISSUES

    Winner: iFAST Corporation

    Runner-up: Keppel DC REIT

    Runner-up: SPH REIT

    FOREIGN LISTINGS

    Winner: Vard Holdings

    Runner-up: Uni-Asia Holdings

    GOLDEN CIRCLE

    Winner: DBS Group Holdings

Mr Gerald made this and other suggestions last evening at the 16th Investors' Choice Awards, which recognise companies with good corporate governance practices. Among the recipients were DBS Group, which won several awards, Keppel Corp and Singapore Press Holdings, a runner-up in the services category for the most transparent company award.

Mr Gerald noted that it is mandatory in some countries for listed companies to appoint a full-time internal auditor, and suggested that Singapore consider doing the same.

"The audit committee of the board is an important structure of a listed company but the basic problem of the committee is that no matter how competent the members, they cannot devote full-time effort to the company and cannot meet regularly," he said.

To further protect investors, Mr Gerald proposed a split in the SGX's dual role as a profit-making company accountable to its shareholders and its regulatory function.

Other international financial centres, such as Hong Kong, Australia and London, had established separate regulatory bodies to oversee their stock markets years ago, he noted.

"Such a move could bolster confidence in SGX on its efforts mounted to curb manipulation in share prices and help silence the complainants on the conflict of interest faced by the SGX in balancing its profit-making and regulatory roles."

Sias, for its part, plans to help shareholders seek accountability from the boards of listed firms by posing at least three questions on every annual report issued, starting with companies that have low corporate governance ratings, Mr Gerald added.

The questions will focus on the company strategy, financial statements and their corporate governance practices.

"This exercise, we hope, will help focus discussions at shareholder meetings and help companies to provide better accountability," he said.

To achieve this, Sias will need to raise another $1 million annually.

Mr Chan Chun Sing, Minister in the Prime Minister's Office and secretary-general of the National Trades Union Congress (NTUC), congratulated Sias on "16 years of very good work" at the gathering.

Sias had empowered Singaporeans through educational programmes, enabled responsible civic action, and evolved to become an organisation that encourages corporations not only to do well but also to "do good and to do right", he said.

"What Sias has done very successfully over the last 16 years is to, through various (forms of) outreach, allow fellow Singaporeans to be more informed investors."

CapitaLand became the first real estate company to be inducted into the Hall of Fame for the Most Transparent Company Award category at the gathering. This is the highest accolade a company can attain under this category.

CapitaLand was inducted because it was recognised as the most transparent company across all sectors for three consecutive years from 2012 to last year.

 
A version of this article appeared in the print edition of The Straits Times on October 17, 2015, with the headline ''Compliance adviser' to protect investors?'. Print Edition | Subscribe