This 2016 report revisits the 2013 study of risk governance undertaken by the Institute of Singapore Chartered Accountants (ISCA) and KPMG in Singapore.

The 2013 study was done at a pivotal time in Singapore’s corporate governance history, when the Singapore Code of Corporate Governance (CG Code) was revised in 2012 to incorporate new requirements relating to risk governance.

A representative sample of 250 Singapore listed companies were examined with a focus on the extent that disclosures complied with the requirements in the SGX LR 1207 (10) and CG Code. Particular attention was paid to the roles, responsibilities and risk management practices of the Board and board oversight committee.

The 2016 study revisits the original focus areas and includes additional areas relating to risk tolerance, risk policies, risk culture, risk types and fraud risk management. Interviews with independent directors, leading risk practitioners, an academic, and a regulator were also conducted to provide further insights into the progress and key challenges in establishing adequate and effective risk management and internal control systems.

The key findings were:

1. Risk management disclosures have improved over time
2. Large Cap disclosures are more forthcoming than Mid and Small Caps
   
3. GLCs’ disclosures are more forthcoming than non-GLCs
   
4. Disclosures of risk governance structures and practices differ by sector (with Finance leading the way)
   
5. More Boards are disclosing their responsibilities over risks
   
6. Management level risk responsibilities and resource disclosures are lacking
   
7. Disclosures of risk culture and risk behavioral practices are lacking
   
8. Risk category and risk type disclosures could be enhanced
   
9. Fraud risk management tends to revolve around whistle-blowing
   
10. Inconsistency in disclosures exist in relation to the Board’s conclusion on the adequacy and effectiveness of risk management and internal controls.
    

This report is intended to highlight that effective corporate governance goes beyond establishing structural elements and involves the instilling of behavioral factors such as culture and values. It also offers insights on enhancements to the CG Code which will be reviewed in due course.