See following excerpt from BT article by Lynette Khoo and Kenneth Lim on 23/11/11
Most key changes proposed to the corporate governance code remained intact - but one was watered down considerably in the final recommendations to the Monetary Authority of Singapore (MAS).
This involved a proposed nine-year tenure limit for independent directors. The Corporate Governance Council has decided, instead, to leave it to the nominating committee to decide whether a director is still independent after nine years of serving on the board. This followed feedback from the industry that a high number of directors will be defined as non-independent if this code is applied.
The Council said it had sought to avoid being too prescriptive in its recommendations. 'We have to let water find its own level,' said Council chairman Alan Chan, who is also chief executive of Singapore Press Holdings.
The Council recommended that the independence of such directors be subject to 'particularly rigorous review', and the board should explain why the director should be considered independent.
A stricter test of independence, which includes recent associations with substantial shareholders, was kept in place.
The Council also maintained the initial proposal that independent directors make up at least half of the board in certain circumstances. The recommendations were finalised after gathering feedback from 75 respondents between June and July.
The Council yesterday shed light on how each decision was calibrated, weighing the varied views among the respondents.
Mr Chan stressed the need to have a balanced Code that is 'workable in practice'.
To facilitate compliance with the revised Code, the Council recommended that a transitional period be introduced such that the Code will only apply to annual reports for fiscal years commencing from July 2012.
Leo Mun Wai, MAS assistant managing director for capital markets, said MAS will evaluate the Council's recommendations and release its response in due course.
Some industry players were disappointed that the term limit for independent directors missed the cut.
HIM Governance CEO Tan Lye Huat felt that the provision should have been kept and the 'onus should be left to the nominating committee or board to comply or explain' as he believes there is no shortage of directors in Singapore.
Stefanie Yuen Thio, joint managing director of TSMP, said there should be compelling reasons for a director to remain on the board after serving for nine years or he should step down for at least two years.
'The 'explain or comply' policy has not been particularly successful in promoting corporate governance' and companies may adopt boilerplate disclosures, she added.
While the Council acknowledged the risks of long tenures on independence, it said boards needed to have discretion in this regard.
OCBC chief executive David Conner, who chairs the subcommittee on board matters in the Council, said he did not expect any companies to 'take the Code lightly'.
The Council also kept unchanged its initial recommendations to let boards decide the maximum number of directorships for appointees; to fully disclose directors' remunerations; and to decide resolutions by polling.
Loh Hoon Sun, managing director of Phillip Securities, was one of the parties who provided feedback on the initial proposals. He suggested that the appointments of some independent directors should be left to professional bodies, rather than the companies themselves. 'Personally I'm a little disappointed that my suggestion was not adopted,' he said.
But Mr Loh felt that the revised Code in general was an improvement over the 2005 version.
Others note that more could be done to address the business relationships that independent directors have with the companies where they serve.
One matter of debate was what constituted material services that would compromise independence of directors. The proposed definition keeps the annual $200,000 threshold over the past year, and extends it to non-profit organisations linked to the director.
Yap Wai Ming, partner at Stamford Law, felt that the threshold of $200,000 for 'material services' could be lowered.
Are the IDs indispensable?
There are cases of IDs who are way past retirement age who nods off and go to sleep during AGMs, some of them are in their late 70s or 80s, close to their 90s in age.
I have nothing against age, as some like Richard Hu are old but their wisdom, experience, depth of knowledge and alertness of mind are important resources that could be tapped.
But, for some after 9 yrs, they are bored and they cannot hide their boredom; openly sleeping during AGMs----- those who attend AGMs regularly will attest.
A rotation may help; if they are so "invaluable", as claimed; else, such bored and indifferent IDs, should simply go.
Well, nobody is indispensable.
Most or Is it all IDs cannot live forever......