April 19, 2016

Are Singapore Boards Killing Value?

A recent article, “Singapore boards are killing value”, by Andy Mukherjee in Bloomberg’s “fast-commentary” section, Gadfly, was critical of the Singapore Post saga, some boardroom practices, and the pay and worth of Singapore directors. SingPost is currently undergoing a corporate governance review while searching for replacements for its chairman and chief executive officer (CEO). I felt that the sweeping generalisation of Singapore’s (large) listed boards based on the corporate governance woes of a single company, for which the outcome is still unclear, and the selective use of narrow statistics were not quite fair to Singapore-based directors in general. However, the article makes several relevant points. It also raises the need for those of us who are directors to take a good hard look at ourselves and our roles. It is fair to say that Singapore boards have not killed value. The data shows that our companies have generally performed well, and that our corporate governance and board practices are among the leaders. Of course, there will be companies that fall by the wayside, and there are many areas such as those described above that can be improved. What is important is that we recognise that corporate governance is a journey, one that requires us to stay diligent, stay relevant, and make up for our shortcomings. We should also recognise that it is a journey best undertaken in unison by all the players in the corporate governance ecosystem, especially in this period of declining initial public offerings and a lacklustre market. Boards and management have the primary responsibility to ensure that they respectively govern and manage the company for the long-term interests of their stakeholders. Regulators need to lay down relevant and necessary rules, facilitate their compliance, and be clear in their enforcement.

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