SGX proposes five-directorship cap to strengthen board independence

The Singapore Exchange has unveiled proposed amendments to its corporate governance code that would limit directors to holding no more than five listed company board positions simultaneously. The measure forms part of a broader suite of reforms designed to elevate standards of board independence and effectiveness across the city-state's listed sector.

Under the proposed changes, board members would face stricter constraints on their external commitments, reflecting growing concerns that excessive directorship loads compromise the time and attention devoted to individual companies. Regulators believe the cap will enable directors to focus more intensively on their fiduciary duties and contribute meaningfully to strategic decision-making.

The governance overhaul aims to reinforce listed companies' commitment to shareholder value creation by ensuring boards maintain sufficient independence from management and maintain robust oversight mechanisms. The measures signal SGX's determination to align Singapore's corporate governance standards with best international practices and investor expectations.

Companies and stakeholders have been invited to submit feedback on the proposals as part of the regulatory consultation process. The exchange is expected to issue further guidance on implementation timelines and transition arrangements following the review period.