During the launch of the 10th Corporate Governance Week by the Securities Investors Association Singapore (Sias), Education Minister Ong Ye Kung shared that preoccupation with rules and regulations is causing companies to lose sight of the outcomes of good corporate governance.

He said when Corporate Governance becomes a preoccupation; a process-driven, tick-box approach rather than outcome-based approach takes over. Companies observe rules in form, rather than in spirit or in substance."

However, he also admits that rules and regulations are still fundamental to driving stronger and better culture for corporate governance. Ong, who is also a board member of the Monetary Authority of Singapore (MAS), highlighted three trends that should be taken into account in order to bring about better guidelines to achieve long-term outcomes. 

For one, rules need to cater to the rapid advancement of the technology that is disrupting industry and market activities.

Another clear trend is the need to be risk-focused by having a differentiated approach to rule-setting, depending on the risks the activity or the entity. Ong cited the Securities and Futures Act, which has multi-tier rules applying to different entities and nature of their activities.

Finally, he noted the long-standing debate on how comprehensive rules should be today, given the complexities of current industries and markets.

He further shared, “My conclusion is that whichever approach we take for rule-setting, it has to be fit for the times, and cognizant of the stage of development of the industry. This should also be a key consideration in the review of rules related to corporate governance.”