GIC was incorporated in 1981 under the Singapore Companies Act and is wholly owned by the Government of Singapore. It was set up with the sole purpose of managing Singapore’s foreign reserves and currently invests well over US$100 billion globally in a wide range of asset classes and instruments. As a rule, GIC invests outside Singapore.

Source and Purpose of Funds

GIC is a fund manager for the Government, and does not own the assets that it manages. The sources of the Government’s assets managed by GIC, as stated by the MOF, include proceeds from the issuance of Singapore Government Securities (SGS) and Special Singapore Government Securities (SSGS), Government budget surpluses, and proceeds from the Government’s land sales.

The Government does not specify to GIC the proportion of assets from each source. The Government mandates GIC to manage all assets in a single pool, on an unencumbered basis, and without regard to their source, with the aim of achieving good long-term real returns. (An explanation of the Government’s framework for managing its assets and liabilities is available on the MOF’s website.)

Each year, part of the GIC Portfolio returns is tapped by the Government for its annual Budget and spent on key public services that improve the lives of Singaporeans. Under the Constitution, the Government is allowed to spend up to 50% of the long-term expected real return on the net assets managed by GIC and those owned by the Monetary Authority of Singapore and Temasek Holdings in its annual Budget. The Government’s reserves therefore provide a stream of returns that benefit present and future generations of Singaporeans.

The President of Singapore

Since 1991, the Constitution of Singapore has provided for the President of Singapore to be elected directly by Singaporeans every six years. The President is independent of the Government and must not be a member of a political party.

The Constitution gives the President discretionary powers to protect the reserves not accumulated by a government during its current term of office. This is achieved using the two-key system: past reserves can be drawn down only in exceptional circumstances, if the President, after consulting the Council of Presidential Advisers, agrees with the Government’s proposal to draw on the past reserves. The system aims to prevent the Government of the day from drawing on past reserves or spending reserves not accumulated during its current term in office. Past reserves have been drawn to fund special Budget measures rolled out during the Global Financial Crisis, and more significantly in response to the COVID-19 pandemic.

As a Fifth Schedule company, GIC is directly accountable in a number of key areas to the Singapore President. The President is empowered to access any information needed to safeguard the country’s reserves, and has full information about the size of the reserves. No one may be appointed to or removed from the GIC Board without the President’s concurrence. This additional layer of control ensures that the company appoints only people of integrity who are competent and can be trusted to safeguard these assets.

The Government

The Government mandates GIC to manage Singapore’s foreign reserves with the aim of achieving good long-term real returns. The mandate sets out the terms of appointment, investment objectives, investment horizon, risk parameters, and investment guidelines for managing the reserves. In particular, the overall risk that the Government is prepared for GIC to take in generating long-term investment returns is characterised by the Reference Portfolio.

The Government, represented by the MOF, holds the GIC Board accountable for the overall portfolio performance. It does not direct or influence GIC’s decisions on individual investments.

GIC provides monthly and quarterly reports to the Government through the Accountant-General of Singapore. These reports contain the financial statements, holdings and bank account balances. They also provide detailed performance and risk analytics, as well as the distribution of the portfolio by asset class, country, and currency.

Once a year, the GIC Management formally meets the Minister for Finance and his officials to report on the risk and performance of the portfolio in the preceding financial year.

The Auditor-General of Singapore

The Auditor-General, who is appointed by the President of Singapore, submits an annual report to the President and Parliament on his audit of the Government and other bodies managing public funds. This audit includes the Government’s portfolio managed by GIC and the main companies in the GIC Group - GIC Asset Management, GIC Real Estate, and GIC Special Investments. These companies are also audited by GIC’s internal audit department.

Other companies in the Group and the investment holding companies are audited by public accounting firms.

The GIC Board

The GIC Board is responsible for the GIC’s Policy Portfolio that determines the long-term asset allocation strategy and for the overall performance of the portfolio. GIC’s asset allocation operates within the risk constraints determined by the Government in its mandate to GIC.

The Board is supported by five board committees.

International Advisory Board

The International Advisory Board provides the GIC Board, board committees, and the GIC Management with global and regional perspectives on geopolitical, economic and market developments. The advice and perspectives cover a range of investment-related matters; in particular, global investment trends, emerging asset classes, and new growth opportunities.

GIC Management

GIC Management formulates and executes investment strategies. Once the long-term asset allocation strategy (as set out in its Policy Portfolio) is decided by the GIC Board, the management seeks to add value through an overlay of active, skill-based strategies (i.e. Active Portfolio). The management comprises five committees with clear reporting lines and accountability.

Governance Structure Overview

The following chart summarises the accountability of the GIC Board, International Advisory Board, and board committees.