SATS, CDL, CLAS, CDLHT top annual corporate governance scorecard

Jovi Ho
4-min read

Now in its ninth year, the Singapore Governance and Transparency Index 2024 placed a greater emphasis on disclosures and practices

An annual corporate governance study of Singapore-listed companies (listcos) and trusts has returned a poorer grade this year, suggesting that these firms have fallen behind after last year’s record scores.

However, the assessors say comparisons with previous years can be misleading, as stricter assessment criteria were applied in the latest edition of the Singapore Governance and Transparency Index (SGTI).

Now in its ninth year, SGTI 2024 placed a greater emphasis on sustainability disclosures and practices. As regulations and corporate governance practices mature in Singapore, several questions with disclosure rates reaching 100% due to mandatory compliance were removed. Stricter assessment criteria were applied to the remaining questions.

SGTI is jointly conducted by Singapore Institute of Directors (SID), CPA Australia and the Centre for Governance and Sustainability (CGS) at the National University of Singapore (NUS) Business School. The index ranks local listcos on their corporate government practices as well as the timeliness, accessibility and transparency of their financial disclosures.

General category 

This year’s index assessed the corporate governance disclosures and practices of 477 Singapore-listed companies in the general category and 43 trusts in the REIT and business trust category, based on annual reports released by May 31.

The overall scoring system for the general category comprises five pillars for a total of 100 points: board responsibility (35 points), rights of shareholders (10 points), ESG and stakeholders (20 points), accountability and audit (10 points), and disclosure and transparency (25 points). There is also an adjustment for bonuses and penalties, to account for best and worst practices.

Compared to last year’s general category score of 74.8 points, this year’s study awarded listcos 69.3 points, down 5.5 points. SATS took the first position in this category, followed by City Developments in second place. United Overseas Bank U11 placed third, while Keppel Limited and Singapore Telecommunications Z74 tied for fourth position.

In 2024, listcos demonstrated robust performance in disclosures relating to shareholder rights (78%), followed by sustainability-related matters (67%) and accountability and audit (65%).

Large-cap companies with market capitalisations over $1 billion outperformed mid- and small-cap companies.

The most substantial differences were in disclosure and transparency, where large-cap companies scored 17 percentage points higher, followed by sustainability and board responsibilities, which were 15 percentage points higher.

No size effect was observed in the accountability and audit metric.

REITs and business trusts category

The SGTI also evaluates REITs and business trusts on a similar criterion, but with added coverage on the unique nature of their operations. The base score for REITs and business trusts includes questions in the base score for the SGTI (75 points) and additional questions in the base score for REITs and business trusts (25 points) that focus on structure, leverage, interested person transactions, competency of REIT manager or trustee-manager and emoluments, or fees.

Compared to last year’s REIT and business trust category score of 89.3 points, this year’s study scored listcos 86.6 points, down 2.7 points. In this category, CapitaLand Ascott Trust Hmn took first position and CDL Hospitality Trusts J85 placed second. CapitaLand Ascendas REIT A17u and CapitaLand Integrated Commercial Trust C38u ranked third and fourth respectively, while Netlink NBN Trust rounded out the top five entities.

In 2024, REITs and business trusts exhibited strong performance in disclosures relating to shareholder rights (86%). The scores for accountability and audit, disclosure and transparency, and sustainability-related matters are comparable at between 77% and 79%.

Professor Lawrence Loh, Director of CGS, says this year’s SGTI starts a “new dynamic approach” for company assessment. “With the evolving regulatory requirements particularly in sustainability and the advent of new frameworks such as director competency, it is essential for the evaluation to keep in tandem with market changes. We are pleased that our listed companies have continued to perform commendably overall, even if sustainability poses additional challenges for governance.”

Board directors must be able to adapt and transform their organisations, says Yeoh Oon Jin, SID chairman. “The Director Accreditation programme by SID focuses on the skills, knowledge and competencies that boards need to have to steer their companies in this increasingly complex world. We commend the continuous improvement of our listed companies and trusts, which showcases their commitment to robust governance and transparency.”

Charts: CGS, Photo: CPA Australia

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