Date: February 10, 2006
As the traditional corporate reporting and annual report season is approaching, SIAS urges companies and their directors, especially the independent directors, to take on the responsibility of declaring a dividend policy. Many retail investors, especially the retirees, depend on dividends for their livelihood.
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)
