SINGAPORE -- Companies listed on the Singapore Exchange are less transparent in corporate governance issues than their peers in Thailand and Malaysia, according to a report released on Tuesday that covered members of the Association of Southeast Asian Nations.
The study, published by Securities Investors Association Singapore and the Centre of Governance, Institution and Organisations at the National University of Singapore Business School, put overall disclosure levels of companies in the city-state at 64%.
That placed Singapore third in ASEAN, behind Malaysia at 74% and Thailand at 71%. The higher the percentage, the higher the level of transparency. The Philippines scored 53% and Indonesia was at 52%.
The study collected data through the end of June and researched the annual reports, corporate governance reports and websites of the 50 largest publicly listed companies, by market capitalization, from the stock exchanges of each of the five countries.
Published every two years, it aims to pinpoint disclosure levels on the business integrity practices and the anti-corruption policies and strategies of the top companies in the region.
The study assesses corporate governance areas covering business ethics, including internal and external commitments against corruption, as well as reporting and monitoring.
It placed Singapore second in 2016 and 2018, behind Thailand. Malaysia has steadily improved, going from fourth in 2016 to a joint third with the Philippines in 2018 before finally overtaking Singapore and Thailand to claim top spot this year.
"In Singapore companies -- and I'm not so sure how to put this -- there seems to be a reticence, a reluctance, to make disclosures," said professor Lawrence Loh, director at the Centre of Governance.
He noted that the reluctance to make disclosures could be a result of business leaders in the city-state being afraid of the consequences in revealing company information.
"Many leaders, or many companies, try not to say as much as possible because if something happens, it might turn around and hit back on them and they may be very, very embarrassed," Loh said.
Singapore has had its reputation as Southeast Asia's financial hub tainted following high-profile cases of companies running into trouble as a result of poor accountability or management practices, prompting criticism of its companies' self-governance standards.
In recent years, corporate failings have plagued a number of public and private companies in the country. For example, the water treatment company Hyflux ran itself into debt and is still seeking a way to restructure to avoid winding up completely.
Commodities giant Noble Group, whose shares were suspended on the Singapore stock exchange, was in the spotlight previously for exploiting complex accounting standards in a way that some critics have argued was fraudulent.
This year, privately held oil trader Hin Leong's billionaire founder, Lim Oon Kuin, admitted that he had directed his company's finance department not to disclose $800 million of trading losses. The company is facing action from creditors and has been placed under judicial management.
"So, I think what Singapore companies need to do, maybe, is to have a stronger discipline of disclosure," Loh said. "When in doubt, disclose, disclose, disclose -- I think this is the gap."
On the whole, the academic found that overall disclosure levels for the five ASEAN countries improved to 63% this year, from 56% in the previous study, and that 97% of all companies surveyed had publicly committed to compliance with anti-corruption law.
However, Loh observed a disparity between Singapore's standing in global corruption benchmarks and its companies' performance in this area.
Transparency International's Corruption Perceptions Index 2019 ranked Singapore the fourth-least-corrupt country out of 180, with the city-state the only Asian country in the top 10. But the report released on Tuesday held Singapore's companies in a less flattering light.
The study recommended that more Singapore companies establish a regular anti-corruption monitoring mechanism. And instead of making vague promises in corporate announcements, it said companies need to strengthen their ethical standards in practice and make them visible to the public.
David Gerald, president of the Securities Investors lobby group, agreed that corporations in the city-state need to do more to improve their governance practices.
"Corporate culture is very, very important, and very often the culture seems to be 'making money.' Yes, companies must make money, but we are about ensuring that things don't go wrong," he said.
Gerald's association has advocated for the rights of retail shareholders of listed companies, who often lost money when the companies they placed their bets on saw trouble. The group has been pushing for greater accountability from companies to act in the interests of corporate responsibility.
Gerald noted that some companies in Singapore have only done the bare minimum on corporate disclosures in their annual reports and called for change to preserve the integrity of listed companies.
"Governance is not good governance without integrity," he said.