Netlink NBN Trust, UOB and ComfortDelGro lead Asean Corporate Governance Scorecard
By FELICIA TAN
The Edge, 14 December 2022
Singapore-listed business entities were said to have performed much better in their corporate governance practices in 2021, says the latest edition of the Asean Corporate Governance Scorecard (ACGS).
In the 2021 edition of the ACGS, 62 out of Singapore’s top 100 business entities scored at least 75% out of 130 points in terms of corporate governance compared to the 26 entities in the biennial study in 2019.
The top 100 business entities from Singapore had a combined market capitalisation of $586 billion.
The 62 entities that scored at least 75% out of 130 points put them into the Asean Asset Class, which increased the country’s representation to 26.5% in 2021 from 2019’s 18.8%. However, the average score of Singapore entities in the Asean Asset Class, at 106.2 points, was slightly lower than the average 108.1 points achieved in 2019.
On the other hand, the rest of Singapore's business entities that are outside of the Asean Asset Class scored 93.0 points on average in 2021, registering an increase of 11.7 points more than 81.3 points scored by 74 publicly-listed companies in the same category in 2019.
Of the 100 entities, Netlink NBN Trust clinched the top position, while United Overseas Bank (UOB) kept its second position. ComfortDelGro (CDG) rounded up the top three entities, jumping from eighth place in the last ACGS.
The remaining scores in the top 10 were Singapore Press Holdings (SPH), CapitaLand Investment (CLI), Keppel Corporation, Singapore Telecommunications (Singtel), Far East Hospitality Trust (FEHT), Singapore Post (SingPost) and Sembcorp Industries, in that order.
“Singapore entities have improved significantly in ACGS 2021. However, maintaining and improving corporate governance practices is a continuous journey. The entities must be prepared to deal with new requirements relating to sustainability disclosures, board diversity and board renewal. It is likely that the criteria in the next assessment will be revised to align with new global guidelines in the G20/OECD Principles of Corporate Governance which is currently in its final stages of revision,” says John Lim lead member of the Singapore domestic ranking body and past chairperson of the Singapore Institute of Directors (SID).
OECD refers to the Organization for Economic Cooperation and Development.
Professor Lawrence Loh, director of the National University of Singapore’s (NUS) Business School’s Centre for Governance and Sustainability (CGS), says, “Our REITs and business trusts have put up a strong showing in the first year that they are included in the assessment—72.4% of them scored at least 75% to make it to the Asean Asset Class.”
He adds, “This solid performance extends to the publicly-listed companies, and they now jointly account for more than a quarter of Asean entities in that class. The Covid-19 pandemic will not be the last disruption that businesses encounter. However, good corporate governance performance will assure investors and regulators that these entities can overcome future challenges.”
The ACGS is part of an initiative under the Asean Capital Markets Forum, which is a high-level group of capital market regulators. NUS’s Business School’s CGS and the SID were appointed by the Monetary Authority of Singapore (MAS) as Singapore’s domestic ranking body for the Asean Corporate Governance Initiative since 2013.
Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam took part in the latest edition of the assessment.
The ranking bodies in each country assessed a list of their top 100 publicly-listed business entities by market capitalisation in their jurisdictions. The top 35 companies per country then went through a random peer review assessment by foreign ranking bodies.