CORPORATE GOVERNANCE AND BOARD REMUNERATION DISCLOSURES IN SINGAPORE: CORPORATE RESPONSES TO EVOLVING REGULATIONS AND OWNERSHIP STRUCTURES

Abstract

Corporate governance practices in Singapore are regulated by the Code of Corporate Governance, whose provisions emphasise improved disclosure and transparency in areas such as board nomination and remuneration. The latter forms the focus of this present study. As the Code is based on a comply-or-explain approach where compliance is non-mandatory, this raises questions on its efficacy in shaping Singapore companies’ disclosures. To test this, I employ a difference-in-differences method on a sample of firms listed in Singapore to investigate the effects of a 2012 change in the Code’s remuneration provisions. I show that firms in the treatment group (consisting of firms with primary listing in Singapore) increase the quality of their remuneration disclosures in response to the Code change, relative to the control group (comprising firms with secondary listing in Singapore that are therefore not subject to the Code). Further tests on ownership reveal that firms with substantial institutional investors had similar scores compared to firms without in the pre-period, but improved their disclosure quality significantly more following the Code change. In contrast, government-owned companies had significantly higher scores for the entire sample period compared to non-government-owned peers, but did not experience larger improvements in scores post-Code change.