Raymond Cheung
Chartered Actuary · CRO · Board Adviser · Singapore
SGX Group has just reclassified one of its own directors as non-independent after nine years' service, while keeping him on its Risk Management Committee. The mechanics of that decision are a useful test of whether your board is managing the nine-year cliff edge or just waiting to hit it.
Singapore Exchange's own reclassification of a long-serving director as non-independent after nine years' service, completed in a staged and unremarkable transition in September 2026, is a useful reference point for every Singapore-listed company that has been managing the nine-year tenure rule as a director-level event rather than a committee-composition planning exercise. The SGX RegCo rule capping independent director tenure at nine years has been in force since 2022, and the practical risk it creates is specific: a director's reclassification can drop a three-person audit or risk committee below its minimum independence threshold the day it takes effect, a compliance breach traceable entirely to insufficient forward planning. As a board adviser who has sat on the other side of exactly this calculation, mapping committee independence against anniversary dates eighteen months ahead, the distinction between a board that manages tenure proactively and one that treats it as an annual spreadsheet item is visible in how the transition looks from the outside. Boards that want what SGX Group achieved, a staged, transparent, unremarkable transition, need the same thing: a named succession plan, an eighteen-month runway, and a committee-first rather than director-first framing.
I have sat on the other side of exactly this calculation, mapping out, eighteen months before a director's ninth anniversary, which committees would tip out of compliance and who would need to be recruited, onboarded and up to speed before the clock ran out. What strikes me about the SGX announcement is not the reclassification itself. It is that the transition was staged: one committee chairmanship handed over in June, full reclassification landing in September, remaining seats confirmed as still compliant. That is what the rule working as intended looks like.
Most boards treat the nine-year cap as a director problem
SGX RegCo capped independent director tenure at nine years back in 2022, with transitional arrangements for directors already past that mark. Three-plus years on, I still see boards treat the cap as something that happens to an individual director rather than something that happens to a committee's composition. The nominating committee tracks tenure against a spreadsheet, someone flags an upcoming anniversary, and the conversation starts about six months out, usually framed as "do we renew this director's independence narrative" rather than "what does our audit or risk committee look like the day this seat changes category."
“A tenure cap is not a director-level event. It is a committee-composition event, and it should be planned as one, with a successor identified before the incumbent's independence status changes, not after.”
The reason this matters more for risk and audit committees than for the board as a whole is that SGX listing rules and the Code of Corporate Governance set minimum independence thresholds for those specific committees, not just for the board in aggregate. A board can carry one long-tenured, newly non-independent director comfortably. A three-person risk committee cannot carry the same director if his reclassification drops independent representation below the required majority. That is a compliance breach discovered on an anniversary date, not a governance failure discovered through vigilance, and it is entirely avoidable with an eighteen-month runway.
What good succession planning for tenure looks like
- Map every committee's independence math against each director's individual anniversary date, not just the board's, the committee's
- Identify, at least twelve months out, which committee seats become non-compliant on that date if no successor is recruited
- Recruit and onboard the successor while the incumbent is still active on the committee, so institutional knowledge transfers before the seat changes hands
- Stage the transition, chairmanship first, full committee membership second,the way SGX Group did with its June and September changes
If your board is relying on a single tenure-tracking line item reviewed once a year at the nominating committee, you are managing this reactively. The fix is not complicated, it is a standing agenda item, cross-referenced against every committee charter's independence requirement, reviewed at least annually with an eighteen-month forward window. Boards that get this right never have a Lim Chin Hu moment that looks like a scramble. They have one that looks like SGX's: staged, disclosed calmly, and unremarkable.
Common Questions
What is the SGX nine-year independent director tenure rule?
SGX Listing Rules require that independent directors who have served for more than nine cumulative years be reclassified as non-independent, non-executive directors, unless shareholders approve their continued classification as independent by a two-tier vote. This rule, introduced by SGX RegCo following the Code of Corporate Governance's position that long tenure may compromise a director's independence, has a direct practical effect: directors approaching their ninth anniversary must be tracked against each committee's independence composition requirement, not just the board's overall independence ratio.
How should Singapore company secretaries and nominating committees manage director tenure tracking?
Tenure tracking for Singapore-listed companies should be managed as a committee-composition planning exercise, not just an individual director anniversary calendar. The nominating committee should maintain a forward-looking matrix showing each director's anniversary date against each committee's independence requirement, updated annually with an eighteen-month forward window. When a director's reclassification would breach a committee's minimum independence threshold, the nominating committee needs to have a successor identified, recruited and onboarded before the anniversary date arrives, not after. The SGX RegCo guidance and the Code of Corporate Governance's commentary on tenure both contemplate this planning as a nominating committee responsibility.
Can a Singapore company apply the two-tier shareholder vote to retain a long-tenured director as independent?
SGX Listing Rules provide for a two-tier shareholder vote process under which a director who has served more than nine years can be retained as independent, but only with approval from both a majority of all shareholders and a majority of shareholders excluding the company's substantial shareholders and their associates. This is a high bar in practice, particularly for companies with concentrated ownership. Boards considering this route should assess both the probability of passing and the governance optics of asking shareholders to approve a director whose independence may reasonably be questioned, weighed against the alternative of proactive succession planning and a smooth transition.
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About the author
Raymond Cheung is a Chartered Actuary, C-suite executive and board adviser with more than 20 years of experience across Asia in risk management, insurance, ESG and corporate governance. He is the CEO of CER Consultancy and an accredited trainer at SMU Academy and the Singapore College of Insurance.