Singapore : Singapore's banks, insurers and financial holding companies are likely to face more stringent requirements for independent directors on their boards under new rules proposed by the Monetary Authority of Singapore.
A director may not be considered independent after serving nine straight years on a board, the central bank said in an emailed statement yesterday. The number of independent directors on the nominating committee, remuneration committee and board would also be raised from one-third to a majority, according to the proposed rules, which may take effect on or after January 1, 2012.
Policymakers worldwide are stepping up regulation of financial institutions after pumping in trillions of dollars to bail out companies including American International Group Inc and Royal Bank of Scotland Group Plc. Singapore's central bank, which implemented its corporate government framework in 2007, said it's been closely monitoring such developments.
"The recent financial crisis has further highlighted the importance of effective risk management oversight at the board level," the monetary authority said in the statement.
Singapore's DBS Group Holdings Ltd, United Overseas Banking Ltd and Oversea-Chinese Banking Corp, as well as Citibank Singapore Ltd and insurers such as Great Eastern Holdings Ltd and Prudential Assurance Co will be among those that may be required to adopt the new rules.
The central bank is also considering changing requirements tied to compensation, the skill level of board members and the time commitment from each director.
