Agenda

1. Introduction
2. General Performance
a. Observable Effects
b. Board Issues
c. Stakeholder Issues
3. REIT and Business Trust Performance
4. Integrating Governance and Sustainability
5. Conclusion

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 SGTI Partnership
A Collaboration Between

Strategic Media Partner

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 SGTI Advisory Panel
Ms Rachel Eng Managing Director, Eng and Co LLC

Mr Loh Hoon Sun Senior Advisor, Phillip Securities Pte Ltd

Mr Max Loh Managing Partner (Singapore & Brunei), EY

Mr Low Weng Keong Past Global President & Chairman of the

Board, CPA Australia

Mr Wong Wei Kong Editor, The Business Times

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 Corporate Governance Milestones

Revised Code of SGTI extended to

Code 2018 comes
Corporate Governance REITs and
into effect in 2019
(2nd review) business trusts

2009 2012 2016 2017 2018 2019 2021

Governance & SGTI introduced Revised Code of Reviewed the SGTI

Transparency Index Corporate Governance framework and
(GTI) launched (3rd review) methodology

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 SGTI Coverage
General Category (489) REITs & Business Trusts (44)

Excluding 261 companies: Excluding 10 Business Trusts

and REITs
• 11 newly listed
• 29 secondary listings • 2 newly listed
• 42 funds • 2 suspended from trading
• 64 suspended from trading • 6 delisted
• 2 annual report not released for 2 years
• 89 delisted
• 24 others

Note:
SGTI 2022 assessed companies based on their annual reports for Financial Year 2021 released by 31 May 2022.
Other sources of information for assessment include sustainability reports, websites and announcements on the SGX website.

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SGTI Framework – General Category
B.R.E.A.D Base Score (100 points)
Board Responsibilities (35 points)
Rights of Shareholders (20 points)
Engagement of Stakeholders (10 points)
Accountability & Audit (10 points)
Disclosure & Transparency (25 points)
+
Adjustments for Bonus & Penalty (43 points)

=
Overall SGTI Score (143 points)

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 Mean Score – General Category

70.6
67.9 68.7

56.3 59.3
52.3
47.6 49.7
42.1
38
33.9 33.5 31.5 34.9

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

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 Score Change Breakdown

SGTI 2022 SGTI 2021

Base Base
Overall Overall
SGTI SGTI
2022 Bonus Penalty SGTI 2022 2021 Bonus Penalty SGTI 2021
Score Score
Score Score

66.3 13.6 9.3 70.6 65.3 12.7 9.3 68.7

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 Score Distribution
160

140
Number of Companies

120

100

80

60

40

20

0
-20 -10 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
-20
Company Score
2018 2021 2022

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 Sectional Scores
B.R.E.A.D Score by Percentage
82%83%
79%
72% 74%76%73%74%75%
69%
61%59%60% 61% 63%
56%57% 58%58% 58%58%57%60%
53%

38%

Board Rights of Engagement of Accountability

Accountability& Disclosure &
Responsibilities Shareholders Stakeholders Audit
& Audit Transparency
2018 2019 2020 2021 2022

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 Industry Effect

Interquartile range
(IQR) refers to the
difference between the
75th and 25th
percentiles.

• On average, Financials companies had higher mean scores and higher variations in scores
compared with those in other industries.

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 Sustainability: Emerging and
Embedding

Sustainability-Related Disclosures: General

98% 97% 94% 96%
91% 89%
87% 86%
83%
73% 73%
67%

53%

34% 30% 37% 31% 30% 28%

24%

Annual sustainability Non-financial performance Financial performance Corporate objectives Key risks, including
report indicators indicators assessment and
management

2019 2020 2021 2022

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 Sustainability-Related Disclosures:
Stakeholder Relations
87% 85%
82%

70%

59% 57%
55%55%
52% 51% 53%
47%
42%
36%
32%
29%
26%

8% 9%

Efforts to ensure Efforts to interact with Efforts to address How creditors' rights are Activities taken to
sustainable value chain community customers' health and safeguarded safeguard creditors'
safety rights

2019 2020 2021 2022

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 Sustainability-Related Disclosures:
Stakeholder Relations (Employees)
85%
79% 80% 80% 80%
76%
70% 72%
65% 65% 67%
64%

54% 54%
51%
47%

Employee health, safety and Information relating to health, Training and development Data on training and
welfare policy safety and welfare of programmes for employees development programmes
employees undertaken by employees

2019 2020 2021 2022

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 Sustainability-Related Disclosures:
Board Development and Integrity Measures
93% 93% 95%

84%
76%

66%
63% 61%
60% 60%
55% 56%
50% 52% 52%
49%

Policy encouraging Board diversity policy Anti-corruption programmes Key details of whistleblowing
continuous professional and procedures policy, anonymous reporting
development for directors allowed

2019 2020 2021 2022

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 Selection of Directors
89%
86%
82%
77%

38% 40%
33%
29%
20%
14% 13%
11%

Disclosure of skills/experience sought Disclosure of selection process External search conducted

2019 2020 2021 2022

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 Range Effect
Score Improvements (from 2021 to 2022) against 2021 Ranking
60

50 On average, lower-ranked companies

show the highest increase in scores
40
Score Improvements

30

20

10

0
0 10 0 20 0 30 0 40 0 50 0 060
-10

-20
2021 Ranking
• Companies that were ranked top 100 in 2021 experienced an overall decrease in scores
• Companies that were ranked from 300 – 500 in 2021 showed a general improvement in scores
• Companies that were ranked the lowest in 2021 showed significant improvement

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 Size Effect
Weak relationship between firm size and performance is maintained
140 140
2022 2021
Total Score

Total Score
120 120

100 100

80 80

60 60

40 40
Correlation Coefficient = 0.37 Correlation Coefficient = 0.32
20 20
Market Capitalisation ($millions) Market Capitalisation ($millions)
(scaled in logarithm with base 10) (scaled in logarithm with base 10)
0 0
$1 $10 $100 $1,000 $10,000 $100,000 $1 $10 $100 $1,000 $10,000 $100,000

Firm Size Firm Size

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 Performance by Ranking
Lower-ranked companies show highest
increase in mean overall score and in
11.4
score for Engagement of Stakeholders
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Change in mean score

9
7 Higher-ranked companies
Lower-ranked companies
5
3 1.6
1 0.1
-1 Overall Score Score for Engagement of
-3 Stakeholders
-2.4

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 Governance as Impetus for
Sustainability
Governance as Impetus for Sustainability
Governance can drive sustainability

Aspects of governance such as:

• Board and board

committee issues
Direct / Indirect Sustainability
• Risk management
• Shareholder rights

Sustainability is the ‘cart’, governance is the ‘horse’

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Results – General Category

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Results – General Category

22
Results – General Category

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 Summary
1. SGTI 2022 increased almost two points, reached 70 points for the first time
(70.6 for General Category, 85.3 for REIT and Business Trust Category).

2. Average scores in each of the five BREAD sections rose. Engagement of

Stakeholders and Disclosure and Transparency had the highest increase.

3. Financials companies had higher mean scores and higher variations in scores.

4. Sustainability practices and processes are becoming embedded in Singapore

companies. There has been an increase in ESG-related disclosures.

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 Summary
5. Fewer companies report conducting external search for new directors.
However this may reverse going forward, following the latest update to the
Practice Guidance for the Code of Corporate Governance.

6. A levelling effect can be seen with lower-ranked companies having

higher average increases in overall scores vs. higher-ranked companies.
This is similar for small companies vs. big companies.

7. Sustainability seems to be contributing to this levelling effect. Lower-

ranked companies have higher average increases in Engagement of
Stakeholder scores vs. higher-ranked companies. This is similar for small
companies vs. big companies.

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