Term Cap and Renumeration Disclosure for Independent Directors of SGX Listcos

January 2023

Term Cap

Independent directors of SGX listed companies will no longer be considered independent after 9 years of service on the board. As a transitional measure to provide companies with time to find new independent directors, SGX will permit independent directors whose tenure exceeds 9 years during 2023, will be able to continue as an independent director until 31 December 2023.

The new rule introduced by the SGX on 11 January 2023, makes Singapore one of the first of major financial centres to place a hard cap on how long independent directors can serve on boards. Apart from Malaysia which announced in January 2022 that the tenure of independent directors are subject to a hard cap of 12 years effective June 2023, many other listing jurisdictions adopt a comply-or-explain approach (i.e. where a company can choose to justify the continued appointment of an independent director beyond what is recommended), or to subject the extension of the director’s appointment beyond the recommended limit to a shareholder vote.

Remuneration Disclosure

Annual reports for the financial year ending on or after 31 December 2024 of SGX listed companies must disclose the precise amount and breakdown of remuneration paid to directors and the chief executive officer. This contrasts to the current practice of disclosure in remuneration bands of S$250,000.

The new rule introduced by SGX, brings Singapore in line with other major financial institutions such as the United States, United Kingdom, Hong Kong, Australia and Malaysia.