Governance

GIC was incorporated in 1981 under the Singapore Companies Act and is wholly owned by the Government of Singapore. It was established to invest and manage Singapore’s foreign reserves globally in a wide range of asset classes and instruments. As a rule, GIC invests outside Singapore, though we can invest in appropriate Singapore companies if they have a good global footprint and generate good returns for GIC’s portfolio.

Source and Purpose of Funds

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

Each year, part of the GIC Portfolio’s return 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 (MAS) 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. 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 under the Singapore Constitution–a category comprising key statutory boards and Government companies–GIC is directly accountable to the President of Singapore in several key areas. 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 safeguard ensures that the GIC Board comprises people of integrity and competence who can be trusted to protect Singapore’s reserves.

The Government of Singapore

The Government, represented by MOF, 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 objective, investment horizon, risk parameters, and investment guidelines for managing the reserves. The Government approves the Strategic Portfolio, which reflects both the Government’s risk tolerance and return expectations.

The Government holds the GIC Board accountable for the overall performance of the portfolio. 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 include financial statements, holdings, bank account balances, and detailed performance and risk analyses, as well as the GIC Portfolio’s distribution by asset class, country, and currency. Once a year, GIC Management formally meets the Minister for Finance and his officials to report on the risk and performance of the GIC Portfolio for 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 the 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. Other companies in the Group and investment holding entities are audited by public accounting firms. These companies are also audited by GIC’s internal audit.

The GIC Board

The GIC Board is responsible for GIC’s overall performance and ensuring adherence to the risk and return objectives set by the Government. The Board is supported by five board committees that assist in specific areas of governance and oversight.

Board Committees

International Advisory Board

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

GIC Management

Once the Strategic Portfolio is endorsed by the GIC Board and approved by the Government, GIC Management formulates and executes investment strategies, and seeks to add value through an overlay of active, skill-based strategies. GIC Management operates through five committees with clear reporting lines and accountability. These committees comprise senior leaders with deep experiences across asset classes, specialised functions, and geographies. GIC Management also reports to the Government on the risk and performance of the GIC Portfolio.