Corporate Governance

GIC was formed on 22 May 1981 as a private company under the Companies' Act and is wholly owned by the Government of Singapore. GIC does not own the funds it manages, but manages them on behalf of its clients; the Government of Singapore and the Monetary Authority of Singapore. The Ministry of Finance represents the Government in dealing with GIC. The clients set the investment objectives with respect to the expected financial returns over the long term and key overall risk tolerance parameters for GIC, and monitor its overall performance. GIC receives a fee to finance its operating expenditure. The GIC management team is given the autonomy to decide where and how to invest, within the parameters of the strategic asset allocation set by the GIC Board, which is translated from the clients' investment objectives. The GIC management team also has the autonomy to recruit and remunerate. In turn, the management reports to its own Board of Directors which provides overall guidance and direction. GIC is accountable to its clients.

As GIC manages the country's foreign reserves, GIC has been designated a "Fifth Schedule" company under the Constitution of the Republic of Singapore. As a "Fifth Schedule" company, GIC comes under the purview of the President of Singapore in various key areas. The appointment and/or removal of GIC's Directors and Group Managing Director requires the assent of the President. GIC is also required to submit its financial statements and proposed budget to the President for approval. The President is entitled, at his request, to any information concerning GIC. In addition, GIC is regularly audited by the Auditor-General.

Several Board Committees, which include independent advisors among their members, ensure that GIC's operations are fiscally and ethically sound. These include:

Investment Committee
The GIC Investment Committee provides oversight of GIC's performance and risk profile, and the management's implementation of investment policies, and makes appropriate recommendations to the Board on investment policy matters.

The Terms of Reference are:

1. To review and evaluate recommendations made by the management on asset allocation for approval by the Board.
   To review and evaluate new asset classes or strategies proposed by the management, and to make its recommendations to the Board.
   
   
2. To review and evaluate the performance of portfolios managed by GIC as the Committee may think fit and to report its findings to the Board.
   
   
3. To review and evaluate matters relating to investment policy as the Committee may think fit, or as may be directed by the Board, and to make its recommendations to the Board.