When it comes to choosing stocks, most investors use traditional financial metrics such as earnings, return on equity and net asset value. Some might look at charts while others use a combination of fundamentals and technical indicators.
In that same year, a Singapore Management University study noted that the Singapore Corporate Governance Award winners over a period of four years outperformed the Straits Times Index. • Only 23.9 per cent of companies disclosed their key risks and how these risks were assessed and managed.Given the current Covid-19 pandemic and the added stress and risks that companies are faced with, the lack of a risk management policy and guidance of risk by the board can result in mismanaging possible opportunities while underplaying potential threats.
Most importantly, they must understand that companies are only as good as their employees and, in this regard, that senior management and the board are particularly crucial in instilling a culture of transparency and honesty. The SGTI is compiled by the National University of Singapore's Centre for Governance, Institutions and Organisations and is aimed at assessing companies on their corporate governance disclosure and practices, as well as the timeliness, accessibility and transparency of their financial results announcement.
The Stars scoring system was developed with the CGIO and categorises companies into five bands. Data is also provided for previous years so investors can track whether the governance practices of prospective companies have improved over time.