Monetary Authority of Singapore Annual Report 2010/2011
Our Work
ENSURING SAFETY AND SOUNDNESS OF FINANCIAL INSTITUTIONS AND FINANCIAL SYSTEM   27
Prudential Supervision and Surveillance   27
Fostering a Sound and Reputable Financial Centre   27
Property Market Measures   28
Review of Deposit Insurance Scheme in Singapore   28
Insurance Resolution and Policy Owners' Protection   28
Review of Insurance Act   29
Enhancing Safeguards for Retail Customers   29
Enhancing Regulatory Regime for Fund Management Companies   30
Achieving Fair Dealing Outcomes   30
Enhancing Corporate Governance Standards   31
Conclusion of First Two Civil Penalty Cases   31
Box 3: The Representative Notification Framework   32
Enhancing Market Conduct   33
Audit Assurance   33

Enhancing Corporate Governance Standards

There has been increased emphasis on effective corporate governance internationally following the global financial crisis. In April 2010, MAS completed a consultation on proposed amendments to the corporate governance regulations and guidelines for locally incorporated banks, financial holding companies and direct insurers (relevant FIs). The revised regulations and guidelines were issued in December 2010. The enhanced corporate governance framework emphasises the importance of the role played by the Board in overseeing the soundness of their financial institutions. MAS tightened the definition of independence by requiring the Nominating Committee to consider the length of service on the Board as an additional criterion in determining the independence of directors. The number of independent directors required on the Board and Board Committees was also increased from one-third to a majority. MAS also included guidance on our expectations on roles, responsibilities and skills of the Board in overseeing the relevant FIs' risk management and compensation systems. Additional guidelines on establishing a continuing development programme for directors and the need for directors to commit sufficient time and have the appropriate skills to perform their roles effectively were introduced.

In addition, MAS established the Corporate Governance Council in February 2010 to promote a high standard of corporate governance in listed companies in Singapore. The Council is chaired by Alan Chan, Chief Executive Officer, Singapore Press Holdings and comprises representatives from the business community and various stakeholder groups. Since its establishment, the Council has carried out a comprehensive review of the Code of Corporate Governance to enhance the corporate governance framework in Singapore. A public consultation paper was issued in June 2011 to seek comments on the proposed changes to the Code. The Council will review the feedback received, and thereafter submit its finalised recommendations to MAS by end 2011.