Date: February 10, 2006
SIAS notes that many companies either do not have a dividend policy or are not disclosing them to shareholders. Dividends is an integral part of long term investors’ return and a declared dividend policy enables investors to achieve better financial planning and portfolio allocation. Having regular and predictable dividends would likely help a company to attract long term shareholders.
SIAS believes it is important for companies to disclose a dividend policy. Disclosing a dividend policy improves corporate governance by adding to the transparency of the company. Having a declared policy also demonstrates to investors that the company has a proper capital allocation plan.
There are some companies who have done so and SIAS commends them for their transparency. These companies include ComfortDelgro, F&N, NOL, OCBC, Singapore Exchange, Sing Post, Singapore Food Industries and International Factors.
SIAS presents these guidelines to companies:
Guidelines to a Good Dividend Policy
Mr David Gerald J.
President & CEO
Securities Investors Association (Singapore)