eGuide to CG Code

This version of the Code has at its core broad Principles of corporate governance. Compliance with, and observation of, these Principles is mandatory. These Principles set out broadly accepted characteristics of good corporate governance. Companies are required1 to describe their corporate governance practices with reference to both the Principles and Provisions, and how the company’s practices conform to the Principles.


1 MR 710 and CR 710.
A. Explanation

The 2018 Code has two levels:

  • Principles which are overarching and non-disputable statements of good corporate governance.
  • Provisions which are actionable steps that guide companies in complying with the substance of the Principles.

The “comply or explain” aspect of the Code is effected through the SGX-ST Listing Rules. Specifically, MR 710 and CR 710 (which were revised with the issue of the 2018 Code) states that the company “must describe in its annual report its corporate governance practices with specific reference to the principles and the provisions of the Code. [It] must comply with the principles of the Code. Where [the company’s] practices vary from any provisions of the Code, it must explicitly state, in its annual report, the provision from which it has varied, explain the reason for variation, and explain how the practices it had adopted are consistent with the intent of the relevant principle.”

Read closely, this Listing Rule specifies several requirements which are described in this and the (next) Introduction paragraph 8.

The first is that it is compulsory to comply with, and observe, the Principles. This represents a shift in the 2018 Code: the application of “comply or explain” is now contained in the Provisions, and not the Principles.

The second requirement is that companies must disclose their corporate governance practices in relation to both the Principles and the Provisions. This represents a recalibration of disclosure standards.

Prior to the 2018 Code, disclosures by companies had tended to focus on whether they complied with the Guidelines (Provisions). Now, companies are asked to describe their corporate governance practices with reference to both the Principles and Provisions, and how the company’s practices conform to the Principles.

The application of the requirements under the Code Provisions is described in paragraph 8 of the Introduction.

B. Related Rules and Regulations
  • MR 710 and CR 710: Annual Report.
C. CG Guides
  • Board Guide 1.6: The “Comply or Explain” Regime [Corporate Governance]
  • Board Guide Appendix 1I: “Comply or Explain” – An Explanation of the Regime [Corporate Governance].
  • Board Guide Appendix 1K: Outline of the 2-18 Code of Corporate Governance
D. Related Articles




eGuide to CG Code
Definition of Corporate Governance
History and Structure of the Code
Role of the Board
Role of the Chair
Focus on Long Term and Sustainability
Revised Code Structure and Approach
Mandatory Principles
Provisions and Variations
Thoughtful and Meaningful Application
Board Matters
Principle 1
Provision 1.1
Provision 1.2
Provision 1.3
Provision 1.4
Provision 1.5
Provision 1.6
Provision 1.7
Principle 2
Provision 2.1
Provision 2.2
Provision 2.3
Provision 2.4
Provision 2.5
Principle 3
Provision 3.1
Provision 3.2
Provision 3.3
Principle 4
Provision 4.1
Provision 4.2
Provision 4.3
Provision 4.4
Provision 4.5
Principle 5
Provision 5.1
Provision 5.2
Provision 5.3
Remuneration Matters
Principle 6
Provision 6.1
Provision 6.2
Provision 6.3
Provision 6.4
Principle 7
Provision 7.1
Provision 7.2
Provision 7.3
Principle 8
Provision 8.1
Provision 8.2
Provision 8.3
Accountability and Audit
Principle 9
Provision 9.1
Provision 9.2
Principle 10
Provision 10.1
Provision 10.2
Provision 10.3
Provision 10.4
Provision 10.5
Shareholder Rights and Responsibilities
Principle 11
Provision 11.1
Provision 11.2
Provision 11.3
Provision 11.4
Provision 11.5
Provision 11.6
Principle 12
Provision 12.1
Provision 12.2
Provision 12.3
Managing Stakeholder Relationships
Principle 13
Provision 13.1
Provision 13.2
Provision 13.3
Practice Guidance
Board Roles and Director Duties
Board Composition and Guidance
Chairman and CEO
Board Membership
Board Performance
Procedures for Developing Remuneration Policies
Level and Mix of Remuneration
Disclosure on Remuneration
Risk Management and Internal Controls
Audit Committee
Shareholder Rights and Engagement
Engagement with Shareholders
Managing Stakeholder Relationships
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