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SGX has introduced new listing rules requiring the holding of general meetings in Singapore, poll voting for all resolutions and disclosures of relevant details on voting outcomes (the “New Rules”). The New Rules take into account numerous comments received from the public consultation in 2011 and were refined after intensive engagement with various stakeholders. Holding of General Meetings in Singapore General meetings are an important channel for issuers to engage their shareholders. Through general meetings, all shareholders are given the opportunity to interact with the board and the senior management of the issuer. Shareholders can ask questions to gain a better understanding of the state of affairs of the issuer, details of the strategic plans and the risks involved in the proposals put up for decisions. General meetings that are held outside Singapore make it difficult for shareholders and other stakeholders to attend and use this important communication channel with the issuers. Given the importance of shareholders’ engagement and participation in general meetings, all SGX primary listed issuers will be required to hold their general meetings in Singapore. Where there are legal constraints on an issuer to hold its general meetings in Singapore, shareholders may still be able to participate in the voting process through the appointment of a proxy. Issuers are however required to provide alternative modes of engagement such as webcast and information meetings so that an avenue is available for public shareholders to have direct interactions with the board and senior management. These requirements are contained in Rule 730(A)(1) and Practice Note 7.5 that comes into effect from 1 January 2014. Voting by Poll The practice of voting by show of hands accords each shareholder only one vote regardless of the number of shares held in the issuer. A poll vote can be called by the chairman or at the request of shareholders. Voting by show of hands does not reflect the shareholders’ shareholding interests in the issuer and the voting results may be skewed by shareholders owning an insignificant interest in the issuer. The New Rules will require issuers listed on SGX to conduct voting by poll for all general meetings. Voting by poll allows for an equitable and transparent voting process. Shareholders will be better able to demonstrate their concerns in a manner more accurately reflective of their shareholdings. SGX recognizes that voting by poll may involve additional cost and resources for issuers who have not adopted this practice. However, the increased transparency of the voting process, greater shareholders’ participation in general meetings and improved overall corporate governance of the issuer justifies the increased cost for the betterment of the issuer and its shareholders. All shareholders are strongly encouraged to continue attending and participating actively in general meetings. Shareholders are entitled to exercise their voting rights and express views to the boards and senior managements at general meetings. Issuers are advised to review their articles of association or constituent documents (“Constituent Documents”) in preparation for the adoption of poll voting. Where the Constituent Documents consists of any provisions that contravene the New Rules, issuers are required to obtain shareholders’ approval for amendment of these Constituent Documents to align the relevant provisions with the requirements under the New Rules. Appointment of Independent Scrutineers Independent scrutineers are appointed to provide better assurance of the conduct and integrity of the voting process and result. Issuers should review the suitability of the scrutineers carefully, taking into account the existing role and appointments of the scrutineer or their related parties in the issuer and whether they are able to make an independent assessment of the voting procedures. A scrutineer is considered independent if:
Greater Transparency of Voting Outcomes Associated with poll voting is the issuer’s ability to enhance transparency of voting outcomes. The New Rules require all issuers listed on SGX to disclose details of the voting results. The disclosure of voting results is an important component of the voting process. It enhances the transparency as well as the integrity of votes taken at general meetings. The disclosure of voting results also improves the dissemination and quality of information to all shareholders. The enhanced disclosure requirements are in line with the revised Code of Corporate Governance 2012. An implementation period of two years will be given to all issuers to transit to mandatory voting by poll, appoint independent scrutineers to oversee the voting process and enhance their disclosures on voting outcomes. The rules on poll voting and disclosure of detailed voting outcomes will be effective for all general meetings held on and after 1 August 2015. During this transition, issuers are required to continue to immediately announce, after each general meeting, whether the resolutions put to the general meeting were passed. SGX encourages issuers to adopt voting by poll for their general meetings, as soon as practicable, to achieve greater transparency of the voting process and enhance corporate governance standards. SGX will continue to regularly engage market participants, issuers and the marketplace to promote best practices in shareholder engagements and uphold the highest standards corporate governance. Mohamed Nasser Ismail Head of Issuer Regulation Note : For more “Regulator’s Column” pieces, please refer to the “Regulation” section on www.sgx.com |
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Singapore Exchange Limited Company Reg No. 199904940D 2 Shenton Way, #19-00 SGX Centre 1, Singapore 068804 Main: (65) 6236 8888 Fax: (65) 6535 6994 |
