Singapore's investor advocacy body Sias has introduced two new awards to reward listed companies for good corporate governance and shareholder communications as well as for adopting environmental and social principles.
The Securities Investors Association (Singapore) will present the new awards at its annual Investor Choice Awards on Sept 19. It is discontinuing the most transparent company award, but integrating the transparency criteria into the corporate governance award.
Sias president and chief executive David Gerald yesterday said it introduced the new Sustainability award as it was time to encourage more firms to adopt principles in this area. "When the haze last hit Singapore, companies that were not environmentally friendly saw their products taken off shelves in supermarkets. That resulted in their bottom line being hurt, and investors walking away."
Companies that excel in communications with stakeholders will be recognised this year with the new Shareholder Communications Excellence honour.
"Some mid- and small-cap firms don't want to have full-time investor relations (IR) because of the costs. But when you have a crisis, you are going to spend about half a million dollars resolving it.
"That's why we are introducing the award because we want better communications between companies and shareholders... If you're going to be spending time with lawyers, accountants, communications experts preparing press statements, you are spending valuable time on issues that could have been easily settled."
Candidates for this award will be assessed on various criteria, including whether they have an IR policy, a corporate website with critical performance reports and information on the board, notice of annual general meeting (AGM) voting results and disclosure of AGM minutes, said Professor Lawrence Loh, director of the NUS Centre for Governance, Institutions and Organisations (CGIO).
HURT BY THE HAZE
When the haze last hit Singapore, companies that were not environmentally friendly saw their products taken off shelves in supermarkets. That resulted in their bottom line being hurt, and investors walking away.''
SIAS PRESIDENT AND CHIEF EXECUTIVE DAVID GERALD
The partners for the corporate governance awards are NUS CGIO and Thomson Reuters, which will provide the financial performance ratings.
This year, Reits and business trusts will also be assessed on their financial performance for the awards in addition to how well they score on corporate governance.
"Good corporate governance must also translate to good financial performance for them to be considered," Mr Gerald said.
They will also be assessed on whether the audit committee reviews all significant interested party transactions and whether unit holders have access to this information.
"We also look at whether they disclose base fees and performance fees based on net property income, if Reits disclose the justification for making acquisitions and divestments; and what they are paid for it," Prof Loh added.