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Back to Global Corporate Governance Trends for 2025
Singapore
Enhancing governance through stronger investor engagement
In the past years, many aspects of Singapore’s governance ecosystem have been strengthened, such as tweaks to the rules involving independent director appointment and renewal, the mandate for board diversity policies, and remuneration disclosures. Recognizing the important role investors play in governance, we expect a greater focus on improving their support infrastructure in the year ahead.
The local exchange regulator (SGX RegCo) has taken the proactive step to avoid the “clustering” of Annual General Meetings (AGMs) to facilitate shareholder participation. The plan is to introduce and maintain a calendar of AGMs for large issuers. Large issuers will be requested to submit their proposed date and time period of their upcoming AGM to SGX RegCo, ensuring that their AGMs do not conflict with the AGM of another large issuer.
In addition, in April 2024, SGX RegCo launched a consultation paper proposing a listing rule change that will facilitate shareholders to call special general meetings. Currently, Singapore-listed firms have no regulatory obligation to respond to shareholder calls for special general meetings. Historically, domestic companies have been reluctant to grant such requests. If passed, it will be a welcome change to the investor community.
Strengthened sustainability reporting regime
Beginning in 2025, SGX RegCo will require all issuers to start reporting Scope 1 and Scope 2 greenhouse gas emissions. This is an extension of the recommendations from the Task Force on Climate-related Financial Disclosures that Singapore mandated in 2022. Their climate-related disclosures must also start incorporating the IFRS Sustainability Disclosure Standards’ climate-related requirements, issued by the International Sustainability Standards Board. Companies listed on the Singapore Exchange are urged to use the disclosure mandate as an opening to demonstrate resilience against climate risks, as well as seize opportunities as part of the country’s transition towards a low-carbon economy.
Hong Kong
Heightened governance standards for listed companies
On the heels of its recent initiatives to enhance diversity in the boardroom, the Hong Kong Stock Exchange (HKEx) launched a consultation paper in June 2024 to solicit feedback on additional updates to the corporate governance practices the Exchange intends to introduce moving forward. Many of these updates focus on improving disclosures around risk management and internal controls, board performance reviews and the board skills matrix, as well as board and workforce diversity policies. It also intends to require nomination committees to be comprised of different genders to better enable the push for greater diversity.
Regarding board and director independence (and similar to what Singapore and Malaysia have done), the Exchange is proposing to limit the terms of independent directors to nine years. In addition, HKEx intends to introduce the concept of Lead Independent Directors for boards whose Chairs are not independent.
On the issue of over-boarding and directors’ capacity to effectively discharge their duties, the proposal limits the maximum number of listed boards a director can sit on to six, also requiring disclosures around the length and types of training they have undergone during the year. More specifically, the proposal outlines that first-time directors will have to undergo at least 24 hours of training within the first 18 months of appointment.
HKEx published conclusions to this consultation on 19 December 2024. Based on the feedback received, the exchange will adopt the proposals outlined within the consultation paper, with certain modifications or clarifications. These new requirements will apply to corporate governance reports for financial years commencing on or after 1 July 2025, with three and six-year transition periods for the new rules on over-boarding and long-serving INEDs respectively.