The nine-year rule has been a necessary jolt, forcing boards to re- examine composition, succession and independence
IN THE wake of high-profile corporate scandals and the global financial crisis, regulators have progressively strengthened measures to encourage board refreshment.
The nine-year rule was introduced with some discretion in implementation by the board in the Code of Corporate Governance in 2012, and evolved into a “two-tier” voting system in 2018. After limited success, the Singapore Exchange (SGX) Listing Rules hardcoded the nine-year rule in 2023.
Third time’s the charm
The decision by SGX to cap independent director (ID) tenure was a watershed moment.
According to the Singapore Directorship Report 2025 by the Singapore Institute of Directors, the proportion of IDs serving more than nine years has fallen dramatically from 20.9 per cent in 2023 to just 3.2 per cent today, with a few firms either exempt or awaiting their next annual general meeting.
Initial concerns around the lack of bench strength, leading to the incumbent ID population circulating only amongst themselves in a game of musical chairs, have not materialised. Against the backdrop of 42.6 per cent of all current IDs being newly appointed, 45.8 per cent have never served on an SGX-listed firm before.
Structural independence has also been achieved at scale: 78 per cent of firms have boards where the majority of directors are independent, with almost a third of listed companies now chaired by IDs. All these developments point to a reshaping of board composition across the market and present a significant milestone.
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New perspectives at the table
The push for renewal has also accelerated progress on diversity.
On the gender front, women now occupy 18.3 per cent of all board seats compared to 14.9 per cent two years ago. The proportion of all-male boards has dropped sharply from 41.5 to 30.1 per cent, led by large-cap firms (only 6.5 per cent of them now are without a female director).
The generational profile of boards is changing too, with 64 per cent of new director appointments under 60 years of age, reflecting a broader inclusion of Generation X and younger professionals into the fold. This suggests that boards are rethinking how they engage with innovation, new talent and longer-term strategy, given that this demographic is said to be more attuned to broader stakeholder expectations, as well as the current technology and sustainability issues facing businesses today.
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From form to substance
Encouraging as the progress may be, more remains to be done. Directionally, boards are getting better with the formal aspects of governance (i.e. independence ratios, committee structures, compliance disclosures). But what next?
There are compelling reasons to now focus on the qualitative dimensions of board effectiveness: how boards make decisions, how they navigate dissent, and how they balance strategic foresight with practical oversight. For one, exercising independence requires psychological safety and a conducive board culture as much as it requires structural separation.
True independence cannot be simply prescribed. Much of it depends on directors having the context, confidence and curiosity to challenge, question and contribute meaningfully. As is often said: “Having a room full of IDs does not automatically make for independent thinking.”
Other challenges ahead
The nine-year rule has ensured renewal, but renewal also challenges continuity, such as the loss of institutional memory that is inevitable with each director’s retirement. On the flipside, while new directors bring fresh perspectives, they also face a steep learning curve in understanding the regulatory environment, sectoral nuances and board dynamics of their companies. Boards that manage this well have to invest in thoughtful succession planning, extended onboarding programmes and active mentoring by experienced members.
Board diversity should be grounded in more than just compliance or tokenism. As boards renew, nomination committees must draw from a broader talent pool to tap first- time directors and professionals from non-traditional backgrounds. Yet, as with independence, the test lies in effectiveness.
Diversity adds value only when boards integrate it into decision-making by making it deliberate, e.g., through rotating committee assignments. Board and committee chairs play a crucial role in creating inclusive dynamics, allowing the voices of new appointees to be heard.
Sustaining the trajectory
As the Monetary Authority of Singapore embarks on its review of the Code of Corporate Governance, the conversation around governance in our ecosystem will also likely shift towards impact: how boards contribute to long-term value creation, stakeholder trust and sustainable performance.
Taken together, the findings from the latest Singapore Directorship Report offer a glimpse into the readiness of boards to embrace the rising standards that will inevitably be expected. The nine-year rule has been a necessary jolt, forcing boards to re- examine composition, succession and independence.
Renewal must now be seen as a continuing discipline rather than a compliance milestone. It calls for deliberate succession planning, robust evaluation and investment in director development. It also requires balancing continuity with change, retaining institutional knowledge even as new perspectives enter the boardroom.
The higher intent is more about enhancing the board’s collective capacity to think independently, act decisively and serve responsibly, as opposed to renewal in and of itself. The nine-year rule may have refreshed Singapore’s boards, but it is the practice of reflection, continuous learning and good governance that will ensure their relevance well into the future.
The writer is a working committee member of the Singapore Directorship Report 2025 published by the Singapore Institute of Directors.
