On 9 November 2021, the Monetary Authority of Singapore issued revised Guidelines on Corporate Governance for Designated Financial Holding Companies, Banks, Direct Insurers, Reinsurers and Captive Insurers which are Incorporated in Singapore. The revised Guidelines will take effect throughout 2022 and are designed to provide Singapore with a further improved business environment, coupling high governance standards and greater corporate management flexibility.

A brief history of the Code of Corporate Governance

Singapore’s Code of Corporate Governance was first issued on 21 March 2001. After revisions conducted in 2005 and 2012, in August 2018 the Monetary Authority of Singapore (the MAS) accepted the newly-established Corporate Governance Council’s recommendations to announce a new “2018 Code” and accompanying Practice Guidance.

The latest Guidelines on Corporate Governance for Financial Institutions

Following a consultation process from May – June 2021, on 9 November 2021 the MAS issued its revised “Guidelines on Corporate Governance for Designated Financial Holding Companies, Banks, Direct Insurers, Reinsurers and Captive Insurers” (collectively FIs). The Guidelines incorporate the Principles and supporting Provisions of the 2018 Code of Corporate Governance, together with various Additional Guidelines added by the MAS to encourage better association with international standards and industry good practices by expanding on the responsibilities of the board of directors of each FI:

“The Board should review the FI’s corporate governance framework, culture and conduct framework, business objectives and strategies on an annual basis, or more frequently as appropriate, to ensure they remain relevant and effective”

Compliance with the Guidelines

  • Compliance with the Principles is mandatory for FI’s listed on the SGX.
  • For non-listed FIs including banks, Tier 1 insurers and certain other designated FIs, the MAS expects full compliance with the Principles (save for Principles 11 and 12).
  • For non-listed FIs including Tier 2 insurers and certain other designated FIS, the MAS expects the Principles to be observed or for an explanation to be provided in the annual reports or the FI’s website.

In addition, the MAS expects every FI to observe the Provisions and Additional Guidelines, on the same “comply-or-explain” basis.

  • For non-listed captive insurers, special purpose reinsurance vehicles, marine mutual insurers and run-off insurers, while the Guidelines continue to apply, there is no requirement to explain any variance from the Principles, Provisions and Additional Guidelines.

Expectations in the Guidelines relating to disclosures in annual reports are effective from 1 January 2002. All other expectations are effective from 1 April 2022, save for the Provision (noted below) regarding the independence of an FI’s board and which is effective from 31 December 2022.

What does this mean for FIs?

  • The FI’s board should have a balance of independence and diversity of thought, including the Provision that non-executive directors make up the majority of a board, and that the board is majority independent where the chairman is not independent.
  • There is a clear division of responsibilities between leadership and management, with the Provision that a chairman and a chief executive are separate persons.
  • There is a formal and transparent process for appointment and re-appointment of directors, with the Provision that a Nominating Committee may be established by the FI for oversight.
  • There is likewise a formal and transparent procedure for director and executive remuneration, including the Provision that a Remuneration Committee may be established to assist.
  • The board is responsible for the governance of risk and maintains a sound system of risk management and internal controls, including choosing to establish a “Board Risk Committee”, if appropriate.


The revised Guidelines are designed to provide a more flexible and less prescriptive environment for corporate governance, while bringing improved cohesion and consistency to the marketplace, and should ensure Singapore business platform continues to offer further and better performance and competition, regionally and globally.