SINGAPORE - More needs to be done to look at and improve corporate culture in companies here, said Securities Investors Association Singapore (Sias) head David Gerald.
"Very few organisations intentionally address their culture, which if nurtured conscientiously, can have the profound effect of propelling an organisation forward," he said, noting that a poor corporate culture has also been linked to many corporate scandals.
"There is a need to better understand how boards are addressing culture in their organisations."
Speaking at the launch of the 8th Singapore Corporate Governance Week on Monday (Sept 18), Mr Gerald said that Sias' analysis of over 200 annual reports of companies, mainly in the mid and small caps, revealed a lack of quality in the disclosures.
For example, the first 33 pages of a company's annual report used generic business terms that offered no information or insights into the company's actual business, which only appears in the director's profile and in the key audit matters in the independent auditor's report.
In the area of related party transactions, companies comply with the letter of the law and not the spirit of the law by disclosing only the particulars of the party but not the nature of the transaction.
"In our view, the characteristics of independent directors can dramatically improve corporate governance influences such as disclosure quality," said Mr Gerald.
"Some company boards still have independent directors who have served them for 15 to 18 years of tenure. Maybe it is time these independent directors are called up on to demonstrate to their stakeholders how far they have influenced disclosure quality."
Mr Gerald added that there is evidence today that companies with good corporate governance practices have better financial performances.
It is therefore key to encourage companies to look beyond pursuing profit and focus on purpose, values and culture within their businesses, he said.
"These factors will help to drive behavioural change and long-term thinking which could change how a company does its business and engages with stakeholders positively on a sustainable basis and eventually improve performance over time, which is what investors and stakeholders want," said Mr Gerald.