MAS issues Corporate Governance Consultation Paper

On 18 March 2010 MAS issued a consultation paper that sets out proposed enhancements to the MAS Corporate Governance (CG) Framework which comprises the Regulations and Guidelines for locally-incorporated banks, financial holding companies and direct insurers.

The proposals focus on the importance of the role of the Board (and specifically independent directors) and the need for directors to be equipped with the appropriate skills and have the commitment to oversee the operations of the financial institutions. Key proposals in the consultation paper include, but are not limited to: 

(i) Continuous Development
Assessment of the current skills of the Board on an annual basis and establishment of a continuous development programme for its directors.

(ii) Director Independence
 A director will be considered non-independent after he/she has served on the Board for a continuous period of nine years.

 (iii) Composition of Board and Board Committees
To raise the number of independent directors on the Board, and major committees from one third to a majority.

 (iv) Governance over Risk Management
The Board must establish a dedicated risk management committee and financial institutions must seek MAS’ approval for the appointment of the Chief Risk Officer.

Detailed proposals relating to the Regulations and Guidelines of the CG Framework are contained in the consultation paper.

Comments are due to MAS by 19 April 2010.

To view the press release from MAS please use the following link Corporate Governance Consultation Paper Press Release