Tenure rule for independent directors does not guarantee a 9-year term: SGX RegCo CEO
Singapore Business Review, 3 August 2023
SGX RegCo imposed a nine-year limit for independent directors last year.
Singapore Exchange Regulation (SGX RegCo) CEO Tan Boon Gin said corporations won't be able to achieve diversity if the "existing crop of directors will just swap positions across companies."
Tan said this to clarify the nine-year limit the regulator imposed on independent directors (IDs) of listed companies.
In his speech at Singapore Governance and Transparency Forum 2023, Tan underscored that the nine-year rule does not guarantee IDs a nine-year term.
I want to emphasise that the changes to the rules on independent directors, and our earlier reforms requiring companies to put in place a board diversity policy should always be read together. Both sets of rules are designed to work in tandem to encourage companies to renew and refresh their boards to ensure that they have the necessary 'skills, talents, experience and diversity'," Tan said.
"Just like how new coaches can often revitalise the careers of tennis players, we believe that the infusion of new blood can help companies update themselves, improve their performance and branding, and become more attractive to investors," Tan said.
Tan also encouraged nomination committees to evaluate directors’ performance every year to make sure they still bring benefits to companies.
“Just last week, DPM Lawrence Wong announced the Singapore Institute of Directors’ new accreditation framework for directors to help uplift the directorship profession. I would like to suggest that the Centre for Governance and Sustainability also consider incorporating this into the SGTI scoring framework, so that companies and directors that make the effort to upskill themselves receive appropriate recognition," Tan said.