SGX proposes stricter KPI and executive pay disclosure rules to boost shareholder value by 2027

Singapore Exchange Regulation (SGX RegCo) has launched a public consultation on proposed amendments to its disclosure framework, seeking to “set higher baseline standards for disclosures” while sharpening issuers’ focus on initiatives that drive long-term shareholder value.

In a statement published on 22 April 2026, SGX RegCo said the consultation introduces a series of new requirements spanning executive remuneration transparency, dividend policy disclosures, and investor engagement practices.

If approved, the measures will apply to all issuers on both the Mainboard and Catalist from 1 January 2027.

KPI-linked remuneration disclosures

A central component of the proposal requires issuers to disclose in their annual reports the key performance indicators (KPIs) used to determine remuneration for board members and key management personnel.

Companies will also need to explain how these KPIs align with long-term shareholder value creation objectives.

The move is designed to provide investors with clearer insight into how executive pay structures are tied to company performance.

SGX RegCo chief executive Tan Boon Gin said the requirement would empower investors to make more informed assessments.

“With this, investors can make their own calls about whether issuer KPIs make sense in the context of the company and align with shareholder interests, as well as hold the board and management accountable to these KPIs,” Tan said.

The proposed rule reflects increasing global emphasis on linking executive compensation to measurable performance outcomes, particularly those that reflect sustainable growth rather than short-term gains.

Dividend policy transparency

The second pillar of the proposed reforms centres on dividend policies.

Under the new framework, issuers will be required to maintain and clearly describe their dividend policy within their annual reports.

Tan emphasised that the rule does not mandate companies to distribute dividends, but instead focuses on transparency in capital allocation decisions.

“We are calling on them for more transparency to their investors,” Tan said.

“So, if they are not paying dividends because, say, they are in a growth phase and they need to re-invest all their profits, then they should say so.”

He added that such disclosures would allow investors to evaluate whether retaining earnings aligns with their expectations of value creation.

“Investors can then express their view on whether they agree this is the best use of cash on the balance sheet,” he said.

The requirement aims to address gaps in investor understanding of how companies deploy capital, particularly in cases where dividend payments are inconsistent or absent.

Strengthening investor engagement

The third category of proposed rules focuses on investor engagement infrastructure and communication.

Issuers will be required to maintain an investor engagement website that publishes key information, including annual reports, dividend policies, and investor relations policies.

In addition, companies must describe their investor engagement activities in their annual reports.

These activities may include investor days, roadshows, and corporate visits, offering stakeholders greater visibility into how companies communicate with the market.

Currently, SGX RegCo estimates that around two-thirds of the largest issuers listed on the Mainboard and Catalist either do not disclose having an investor relations policy or do not publish it.

Tan noted that while investor relations alone cannot directly influence share prices, it plays a critical role in ensuring accurate market valuation.

“Although investor relations cannot, by itself, move a stock, it can ensure that the market accurately reflects an issuer’s performance,” he said.

“In other words, it closes the valuation gap.”

He further clarified the regulatory intent behind the measures.

“By themselves, these activities will not move a stock. That is not what regulation is for. That is the job of the market,” Tan said.

“We see these rules as pushing both boards and shareholders to think more about value creation and forming a foundation for two-way engagement.”

Part of broader market reforms

The proposed rules come in the context of wider efforts to strengthen Singapore’s equities market.

They follow the final report of the Equities Market Review Group published in November 2025.

The group, convened in August 2024, was tasked with recommending measures to enhance market competitiveness and investor confidence.

Among its recommendations was a S$30 million “Value Unlock” programme aimed at supporting locally listed companies in developing investor relations capabilities, refining corporate strategy, and improving capital efficiency.

SGX said it has already engaged with more than 130 issuers regarding financial grants available under the programme.

The new disclosure proposals are positioned as a complementary step, reinforcing the broader push towards improved corporate governance and market transparency.

Regional comparisons and long-term approach

Singapore’s initiative mirrors similar efforts in regional markets such as Japan and South Korea, which have implemented value-up programmes to encourage stronger corporate performance and shareholder returns.

These efforts have coincided with gains in major indices, with Japan’s Nikkei and South Korea’s Kospi rising by 18 per cent and 52 per cent year-to-date respectively.

However, Tan cautioned against direct comparisons, noting structural and historical differences between markets.

“Unlike Japan, Singapore is only at the beginning of its value-up journey,” he said, adding that issuers and fund managers would require time to adapt to new expectations and practices.

Tan highlighted the importance of gradual progress in achieving sustainable outcomes.

“Japan is a country that understands the value of doing things well over time. Today, Japanese knives are among the best in the world. Why? Because the country has over 800 years of history as a blade maker,” he said.

“To be clear, I’m not saying that we are going to need 800 years. I am saying that the impact that regulation has on value creation takes time to manifest.”

He described the consultation as an early step in a longer-term strategy.

“The consultation we are launching today is just one step. The market can look forward to more steps as we progress along this journey of excellence,” he said.

Timeline and implementation

The public consultation exercise will run until 22 May 2026, allowing market participants to provide feedback on the proposed changes.

If adopted, the new rules will take effect from 1 January 2027 and apply to annual reports for financial years commencing on or after that date.

As a result, the first set of annual reports complying with the revised requirements is expected to be issued from 2028 onwards.

The phased timeline is intended to give issuers sufficient time to build internal capabilities and align their reporting processes with the enhanced standards.