Limited shareholder inspection rights in Singapore: Worrying legal gap or unnecessary for rankings?

Publication Type

Book Chapter

Version

submittedVersion

Publication Date

1-2023

Abstract

Singapore’s formal corporate law and governance rules normally meet or exceed global standards – which explains why it regularly tops prominent Asian and global rankings for good corporate governance. As such, Singapore’s outlier status, as the only leading economy in Asia that does not provide a specific mechanism for shareholders to access corporate information, is puzzling.In this Article we aim to solve this puzzle by offering two explanations that appear to make sense out of Singapore’s outlier status as having an unusually restrictive shareholder inspection rights regime. The first, demand-side, explanation is that Singapore’s controlling shareholder-dominated landscape generates little demand for greater shareholder information rights. The second, supply-side, explanation rests on two elements. First, as the government is indirectly the largest controlling shareholder in Singapore, it may not have an incentive to expand inspection rights to allow shareholders greater access to the information of its government-controlled companies. Second, and most importantly, shareholder information rights have yet to become established as a significant indicium of “good corporate governance” by globally influential actors. As such, for now, the Singapore government has not needed to supply the formal law to send a signal of good corporate governance by meeting a prominent global standard for inspection rights, because such a standard does not yet exist.Viewed through the lens of our supply-side and demand-side explanations, in the context of Singapore’s unique corporate governance model, its restrictive shareholder inspection rights regime makes sense. Given the success of Singapore’s state and family controlling shareholder dominated system of corporate governance, its lack of shareholder inspection rights does not seem to have resulted in any serious corporate governance maladies. However, there are some signs that Singapore’s model of corporate governance may gradually be changing – and that the international interest in inspection rights is increasing – which may portend a greater need for a more facilitative inspection rights regime in the future.

Keywords

Singapore company law, corporate governance, inspection rights, controlling shareholders, family firms, state owned enterprises

Discipline

Asian Studies | Business Organizations Law | Comparative and Foreign Law

Research Areas

Asian and Comparative Legal Systems

Publication

Research Handbook on Shareholder Inspection Rights: A comparative perspective

Editor

Randall S. Thomas, John S. Beasley, Paolo Giudici, & Umakanth Varottil

First Page

430

Last Page

455

ISBN

9781800377738

Publisher

Edward Elgar

City or Country

Chelterham

Copyright Owner and License

Authors

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