Singapore came in top for corporate governance (CG) requirements among markets in Asia Pacific while Malaysia and Hong Kong ranks third and fourth respectively.
According to a joint study by KPMG and the Association of Chartered Certified Accountants (ACCA), Singapore ranks third globally just behind the UK in first and the US in second. Malaysia ranks in sixth place, followed by Hong Kong in seventh.
The study was done across 25 markets globally, analysing CG requirements in terms of clarity, number and type of instruments used by the different markets as well as their degree of enforceability.
It also hopes to push governments to work towards meeting global CG standards based on Organisation for Economic Co-operation and Development (OECD) principles.
"Given the disparity in corporate governance requirements across the markets we have studied, there is still a long journey ahead of us. Implementing corporate governance well will also prepare companies for the opportunities that come with the anticipated high growth rates of the ASEAN economies," said Irving Low, head of risk consulting at KPMG in Singapore.
Despite Singapore's high ranking due to recent changes to the CG Code and the Singapore Exchange (SGX) listing rules, Singapore should not become complacent.
"While the scores suggest that Singapore has performed relatively well across most of the CG pillars, there are still areas for improvement," said Leong Soo Yee, head of ACCA Singapore. Thee include documentation of board roles, disclosing codes of conduct, as well as making board performance evaluations more formal.
Low added there wasn't a big difference between Singapore and countries such as Malaysia, India and Australia, as its requirements are predominantly principles based.
He feels that with the coming together of the ASEAN nations into a single market next year, "Singapore should strive to take a lead and support other ASEAN member nations to improve corporate governance."
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