The company discloses the engagement of any remuneration consultants and their independence in the company’s annual report.
 
A. Explanation

This Provision covers the appointment of remuneration consultants by the RC, and the related disclosure requirements.

Remuneration is one area that often requires external advice because internal sources including the Board may not be fully objective. In addition, a key aspect of remuneration is benchmarking with comparable organisations. Such data is often not available in-house.

It goes without saying that it is important the external consultant is indeed independent and objective. Some useful measures to achieve these goals include:

  • Requiring disclosures by the consultant and management of past and existing relationships, and the consultant’s declaration of its independence.
  • Ensuring that the consultant is selected by the RC, and reports directly to the RC rather than management.

Where an external remuneration consultant is used, the company should disclose the name and firm, including any relationship the consultant has with the company and personnel that could affect its independence and objectivity.

 

B. Practice Guidance

 

C. Related Rules and Regulations
  • Nil.

 

D. CG Guides
  • RC Guide 7.8: Independent Advisors and Consultations [Stakeholder Engagement].

 

E. Related Articles

 

 

eGuide to CG Code
Overview
Preamble
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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