Yahoo Finance Singapore Puts Company Directors on Notice With New Proposal
(Bloomberg) -- Singapore Exchange Ltd. is proposing a rule change that would make it easier for shareholders to call special general meetings, the latest in an ongoing campaign to improve corporate governance in the city-state.
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Under the proposal, companies would have to take steps within 21 days to hold a meeting whenever a shareholder or group of shareholders with at least 10% of paid-up stock makes the request. Boards opposing the demand can do so in court.
As of now, Singapore-listed companies aren’t obligated to grant shareholder calls for special meetings, which are often campaigns to replace existing directors. Historically, they’ve tended to nullify the requests.
Singapore regulators are trying to improve corporate governance practices, including pushing for more chief executive officer pay disclosure and capping the tenure of independent directors, in response to rising shareholder activism at home and abroad.
The exchange is also trying to boost the appeal of local equities, which have lagged their global peers in the MSCI AC World Index for seven of the past 10 years. The Hong Kong exchange has similar rules for special meetings at listed companies. In the US, it varies by state.
“Companies need to hear what the market is asking for,” said Tan Boon Gin, CEO of Singapore Exchange Regulation, the bourse’s regulatory arm. “If shareholders and investors have a stronger say, companies will have greater incentives to consider their interests, by improving both operational performance and returns to shareholders.”
The consultation for the proposal will be open until May 23. SGX RegCo is also proposing that issuers assist the relevant shareholders by distributing documents such as circulars and proxy forms. Companies will also be expected to secure the board’s attendance at the requisitioned meeting.
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