As the rules of globalisation and trade are rewritten, resilience will become a core component of corporate governance. How will we balance agility with accountability and square short-term performance with long-term stakeholder trust?
The evolving role, expectations and challenges of boards and independent directors
Traditional models of governance, once focused narrowly on compliance and oversight, are now increasingly defined by their adaptability and resilience. The boardroom imperative has shifted and evolved into one which not only ensures compliance but also navigates uncertainty with agility and foresight. Corporate governance, while still a stabilising force and anchor, needs to ensure that it does not compromise its values as it innovates.
This evolution for boards and independent directors represents both an opportunity and a strain. Their duty to exercise reasonable care and diligence remains, but it is being reshaped and tested against the backdrop of constant regulatory changes, demand for faster decisions, digital adaptations and structural and cultural constraints.
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As an example, boards still struggle with incomplete or delayed information, while entrenched business hierarchies can discourage robust debate and challenge to management. This is further compounded by business limitations such as low director fees and a limited talent pool, which can hinder the board’s ability to acquire high-calibre professionals.
There is a growing recognition of the problems, which has led to some positive developments. The recent introduction of a mandatory nine-year tenure limit for independent directors by the Singapore Exchange is a step in the right direction, which seeks to prevent complacency and to combat “rubber-stamping” of independent directors. However, term limits alone do not guarantee effective board renewal or independence, and more can be done.
Effective governance today depends not just on enforcing tenure limits but on reframing board composition and culture. Transparent and credible nomination processes, merit-based selection and improvement to renewal and diversity of thought are crucial in countering entrenched practices and in ensuring independent directors bring genuine objectivity to the boardroom. This also answers the call for higher expectations of board independence that give minority investors a meaningful voice.
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As companies increasingly leverage AI, data analytics and digital processes, boards and independent directors must also evolve beyond traditional financial oversight to address risks ranging from technology to cybersecurity with the same rigour.
Risks and resilience in a changing business and digital environment
In the wake of digitisation and digital transformation, new technologies enable better transparency, quicker decisions and enhanced risk detection, but they also expose firms to risks like cyber threats, phishing scams, data governance challenges and reputational risks.
Boards and independent directors in Asia are racing to bridge the knowledge gap between traditional oversight and emerging digital environments. In particular, rapid digitalisation, escalating sophistication of fraud and new approaches to money laundering are reshaping global trends.
On one hand, tech stacks like data analytics and AI have provided unprecedented visibility and efficiency into governance. Boards have been enabled to detect early warning signs of fraud, breaches, or operational inefficiencies and engage in remote or hybrid shareholder meetings, fundamentally changing board operations and stakeholder engagement.
On the other hand, digital security risks, including threats from cyberattacks and privacy breaches, have elevated the board’s cost and responsibility for cybersecurity oversight and resilience planning. Increasingly new and sophisticated fraud typologies now leverage AI, generative technologies and deepfake techniques, enabling fraudsters to bypass traditional controls and exploit corporate vulnerabilities. Synthetic identity fraud and “Fraud-as-a-Service” have become prevalent, requiring multi-layered authentication and robust compliance frameworks.
Globally, the UN estimates that EUR1.87 trillion ($2.8 trillion) is laundered each year from criminal activities, and the cost of cybercrimes is projected to cost firms $10.5 trillion annually. Evolving legislation now targets not only institutions but also holds boards and senior management directly accountable for Anti-money laundering (AML) compliance failures, particularly in relation to cross-border transactions.
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Moreover, in an increasingly fractured geopolitical and regulatory environment, cross-border compliance risks and divergent compliance standards are redefining governance priorities. The confusion stemming from increased and inconsistent regulations, sanctions and tariffs has also added a layer of regulatory risk and cost to navigate. Boards with global exposure must navigate varying disclosure requirements while maintaining consistent ethical and accounting standards across jurisdictions.
Best practices now and the road ahead
It is little wonder that the rapidly digital environment is increasingly a core risk among boards and independent directors in Singapore and the broader region amid rising regulatory vigilance. Corporate boards are forced to adopt expensive advanced fraud detection tools such as AI-driven analytics, machine learning models for behavioural monitoring and data-heavy real-time alerts to manage high-volume and complex digital fraud.
Boards must balance the adoption of innovative technologies with strengthened risk oversight, compliance frameworks and high ethical standards to safeguard against sophisticated financial crime. Enhanced collaboration across legal, compliance and technology functions within organisations and with regulators will be essential to adapt to this fast-changing landscape.
Beyond new technologies, the answer and future to the changing role of corporate compliance lies in changing mindsets and skill sets. More imagination is needed to vastly reinterpret the role in this age of rising volatility, uncertainty, complexity and ambiguity. New skill sets, such as crisis management and digitalisation, will be called to address these challenges head-on, and that will include attracting, training and retaining the right kind of talent.
Navigating risks
Boards must now operate as both strategic stewards and digital sentinels — navigating layered risks while unlocking long-term value. This dual mandate calls for a deep reconfiguration of how independent directors are selected, empowered and equipped. Today’s governance challenges go far beyond the early optimism about technology. Boards must now operate as both strategic stewards and digital sentinels — navigating layered risks while unlocking long-term value. This dual mandate calls for a deep reconfiguration of how independent directors are selected, empowered and equipped.
This era calls for governance that is not just reactive to disruption, but proactive in turning complexity into a competitive advantage. A culture that is transparent, accountable and adaptive — where independent directors are empowered, not just present and safeguarding the interests of all stakeholders. Singapore risks losing its edge to other regional centres for international arbitration and dispute resolution if it does not heed the call.
Sustained regulatory reform and enforcement, paired with a holistic governance approach, are vital to securing Singapore’s future as a premier international dispute resolution centre and global governance benchmark.
In so doing, boards and independent directors will ensure that Singapore’s blend of “boring stability” and corporate governance remains a powerful catalyst for sustainable growth and enduring trust in an increasingly uncertain world.
Danny Ong is the managing director of Setia Law
