The Monetary Authority of Singapore ("MAS") and Singapore Exchange Ltd ("SGX") had on 27 June 2007 released the findings from a study they had commissioned on the then state of corporate governance of SGX-listed companies in Singapore.  Among the findings from the study was recommendation of measures to improve the effectiveness of the Audit Committee ("AC"). The study recommended that "(a) Board of directors should ensure that there is adequate accounting or financial expertise and experience on the AC.  Shareholders should query companies as to whether there is the necessary expertise or experience on the AC. (b) Regulators should work with other professional bodies and seek the assistance of experienced AC members to share practical insights into the work of the AC with less experienced AC members and to allow for the exchange of ideas from forums and roundtables.  (c) Regulators should encourage, and work with, professional bodies and other market players to develop and disseminate best practice guidance relating to the AC, such as critical financial reporting issues, external audit, internal audit, internal control and risk management."

MAS and SGX examined the recommendation, explored immediate initiatives and discussed the initiatives with various stakeholders, including Accounting and Corporate Regulatory Authority ("ACRA") and professional associations such as the Institute of Certified Public Accountants of Singapore ("ICP") and the Singapore Institute of Directors ("SID").

On 15 January 2008, MAS, SGX and ACRA established the ACGC in order to strengthen the corporate governance practices of SGX-listed companies in Singapore.  ACGC will develop guidance to assist the AC that will focus on the practical aspects and considerations of the work of the AC, including the implications of (i) the requirements of the Singapore Companies Act (Cap. 50); (ii) the principles and guidance of the Code of Corporate Governance; and identify and describe best practices of effective AC.  Its members are drawn from the business community and stakeholders groups such as the ICP, SID, the Law Society of Singapore and the Singapore Association of the Institute of Chartered Secretaries and Administrators.

By Mr Gerald Cheong
Corporate Finance Manager
Ph: (65) 6322-2232
Fax: (65) 6534-0833
E-mail: geraldcheong@loopartners.com.sg
and
Ms Cecilia Law
Corporate Practice,
Senior Legal Associate
Ph: (65) 6322-2283
Fax: (65) 6534-0833
E-mail: cecilialaw@loopartners.com.sg

Loo & Partners
88 Amoy Street, Level Three
Singapore 069907