[Last updated: 1 January 2024, unless otherwise noted]

The Code of Corporate Governance (the Code of Corporate Governance) which is applicable to listed companies in Singapore on a comply-or-explain basis, first came into effect on 1 January 2003 and was most recently revised on 6 August 2018 and updated on 11 January 2023. The Code of Corporate Governance aims to promote high levels of corporate governance in Singapore by putting forth Principles of good corporate governance and Provisions with which companies are expected to comply. The Practice Guidance complements the Code by providing guidance on the application of the Principles and Provisions and setting out best practices for companies.

The Code of Corporate Governance requires that there be a strong and independent element on the Board, with independent directors making up a majority of the Board where the chairman is not independent, and that non-executive directors make up a majority of the Board. The Code of Corporate Governance describes an independent director as one who is independent in conduct, character and judgement, and has no relationship with the company, its related corporations, its substantial shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director's independent business judgement in the best interests of the company.

There should additionally be a clear division of responsibilities between the leadership of the Board and management, and the roles of chairman and chief executive officer should in principle be separate and not be fulfilled by the same person. The Board should also have a lead independent director who should be available to shareholders where they have concerns and for which contact through the normal channels of communication with the chairman or management are inappropriate or inadequate.

All listed companies must establish three sub-committees at the time of listing:

• Audit committee. Comprising at least three directors, all non-executive, the majority of whom, including the committee chairman, should be independent. At least two members, including the committee chairman, should have recent and relevant accounting or related financial management expertise or experience.
• Nominating committee. Comprising at least three directors, the majority of whom, including the committee chairman, should be independent. The lead independent director, if any, should be a member of this committee.
• Remuneration committee. Comprising at least three directors, all non-executive, the majority of whom, including the committee chairman, should be independent.

The audit committee is responsible for reviewing the scope and results of the audit and its cost effectiveness and the independence and objectivity of the external auditors, the adequacy of the issuer's internal financial controls, operational and compliance controls, and risk management policies and systems established by the management (known as the "internal controls") and ensuring that a review of the effectiveness of the issuer's internal controls is conducted at least annually. The audit committee is also expected to meet with the external auditors, and with the internal auditors, without the presence of the issuer's management, at least annually and to review the independence of the external auditors.

The nominating committee is expected to make recommendations to the Board on all director appointments. It is responsible for the re-nomination of the directors, having regard to the director's contribution and performance (such as attendance, preparedness, participation and candor) and determining annually if a director is independent. Where a director has multiple board representations, the nominating committee should decide if that director has been adequately carrying out his/her duties as a director of the issuer and adopt internal guidelines to address the competing time commitments that directors who serve on multiple boards face. In addition, the nominating committee is expected to consider annually, and as and when circumstances require, if a director is independent.

The remuneration committee is expected to recommend to the Board a framework of remuneration for the Board and key executives and to determine specific remuneration packages for each director and the CEO (if not a director). The remuneration committee will also review the remuneration of senior management. Each issuer should also provide clear disclosure in its annual report of its remuneration policy, its level and mix of remuneration and the procedure for setting remuneration. Accordingly, the issuer should report to the shareholders each year on the remuneration of directors and the CEO on a named basis, and at least the top five key executives (who are not directors or the CEO) in bands of S$250,000 (approximately US$189,475) together with the total remuneration paid to the top five key executives.

The Code of Corporate Governance requires that the Board and board committees are of an appropriate size and comprise directors who as a group provide the appropriate balance and mix of skills, knowledge, experience, and other aspects of diversity (such as gender and age), with the intent of avoiding group-think and to foster constructive debate. The board diversity policy as required under SGX-ST listing rules (which must address gender, skills and experience, and any other relevant aspects of diversity), and progress made towards implementing the board diversity policy, including objectives, are to be disclosed in the issuer's annual report.