eGuide to CG Code

This updated version of the Code represents a significant development both in terms of the way the Code is structured, and the way in which companies are required to describe their corporate governance practices.
A. Explanation

This paragraph describes how the 2018 Code has evolved to be significantly different from the previous Codes in terms of its structure and how companies report their compliance with it.

In terms of its structure, the 2018 Code and its predecessors both had two levels:

  • Principles
  • Provisions (2018 Code), or Guidelines (2003, 2005 and 2012 Code)

However, the main differences are:

  • While both Principles and Guidelines operated on a “comply or explain” basis in the predecessor Codes, in 2018, the Listing Rules now emphasise that compliance with the Principles is mandatory, while companies may vary only from the Provisions.
  • A new section, “Comply or explain”, paragraphs 6 to 9, explains the broad intent of the Code and clarifies how companies should apply the “comply or explain” regime.
  • A set of non-binding Practice Guidance, which did not exist in the predecessor Codes, now complements the 2018 Code.
  • The Code is redrafted and streamlined in the 2018 version as follows:
    • Shift away from an instructive style and the use of “should”. The purpose is to move from a box-ticking mindset to more thoughtful and meaningful application of the key tenets of good corporate governance.
    • Important requirements or baseline market practices were shifted to the Listing Rules.
    • Overly-prescriptive or duplicative guidelines in the 2012 Code have been removed, or shifted to the Practice Guidance.
  • The net result of the streamlining reduces the 2012 Code on several fronts:
    • From 16 to 13 Principles.
    • From 82 Guidelines to 51 Provisions.
    • Halving of the word count.

When the changes in the 2018 Code were announced on 6 August 2018, the SGX made consequential changes to its Listing Rules in the following areas:

  • Prescribed training for first-time listed company directors.
  • Criteria for director independence and the proportion of independent directors on a Board.
  • Adequacy and effectiveness of internal controls and risk management systems.
  • Mandatory internal audit function.
  • Disclosure of reasons for non-payment of dividends.


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
eGuide Glossary

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