The Directors’ ISSUE 4 • 2010

BULLETINThe Official Newsletter of Singapore Institute of Directors MICA (P) 093/05/2010

Featuring the BMBA Winners What Makes Them Tick And How Do They Do Things Differently For Better Corporate Governance Singapore Institute of Directors MISSION STATEMENT To promote the professional development of directors and corporate leaders and encourage the highest standards of corporate governance and ethical conduct

THE INSTITUTE’S OBJECTIVES ARE: • To be the national association of company directors for the local business community. The SID works closely with its network of members, professionals such as accountants and lawyers, and the authorities to identify ways to uphold and enhance standards of corporate governance. • To act as a forum for exchange of information on issues relating to corporate governance and directorship in Singapore. The SID plays a leading role in holding discussions and providing feedback to the authorities on matters of concern. • To organise and conduct professional training courses and seminars to meet the needs of its members and company directors generally. Such courses aim to continually raise the professional standards of directors in Singapore by helping them raise their effectiveness through acquisition of knowledge and skills. • To regularly publish newsletters, magazines and other publications to update members on relevant issues, keeping them informed of latest developments. These publications also serve as reference materials for company directors. • To be responsible for the discipline of members. The SID has drawn up a code of conduct for directors in Singapore setting out the standards to ensure they discharge their responsibilities dutifully and diligently. CONTENTS

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PUBLICATION & WEBSITE FROM THE EDITOR 2 COMMITTEE Chairman CHAIRMAN’S MESSAGE 3 Yeoh Oon Jin COVER STORY PricewaterhouseCoopers LLP Featuring The BMBA Winners - What Makes Them Tick And How 5 Members Do They Do Things Differently For Better Corporate Governance Kala Anandarajah FEATURES Rajah & Tann LLP Winds Of Change Over The Corporate Governance Landscape 12 Adrian Chan Lee & Lee Does Good Corporate Governance Translate Into Higher Firm 14 Valuation? Mike Gray Concept Of Legal Representative In PRC Companies - A Look At 18 Tricor Singapore Pte Ltd Legal Issues And Related Practical Concerns Annabelle Yip Dos And Don’ts For M&A In China 21 Wong Partnership LLP Non-Executive Directors’ Fees - The State Of The Market 24 Paul Zaman Statement Of Good Practice - Appointing Alternate Directors 26 Qualvin Advisory Pte Ltd Corporate Governance Developments From Around The World 28 Victor Yeo Nanyang Technological University EVENTS COVERAGE Launch Of Board Appointment Service And 31 Corporate Membership PUBLISHER Members’ Networking Night 33 Singapore Institute of Directors 3 Shenton Way #15-08 Risk Management and Corporate Governance for 35 Shenton House Growing Enterprises Singapore 068805 WELCOME ABOARD (New Members) 37 Tel : 65 6227 2838 Fax : 65 6227 9186 Email: [email protected] Website: www.sid.org.sg EDITOR Kala Anandarajah Sponsor: DESIGN Wini Tenorio PRINTER Entraco Printing Pte Ltd The Business Enablers

1 FROM THE EDITOR

As we approach the end of the 3rd Quarter of 2010, we see a to have good corporate governance practices. It is a question lot more buzz in the economy, both in Singapore and globally. of commitment at all levels of the hierarchy and taking pride But uncertainties continue to remain amidst conflicting in ensuring the goals are met. An important point to note is signals from global leaders. that this does not have to be at the expense of profitably. Directors have to continue to operate amidst this global Apart from the cover story, we have other articles which look uncertainty, particularly where they do cross-border business. at the valuation aspects of corporate governance. This is an Even smaller companies operating only within Singapore area which has seen tremendous interest over the decades with cannot say it is any easier for them as the global issues do find no conclusive evidence as regards whether there is indeed an their way into Singapore as well. Making their commercial increase in valuation. Nevertheless, it is an area that continues and business decisions amidst such an environment is to find interest with various models proposed from time to certainly not easy. Add to it, as a gentle reminder, the duties time. that directors are subjected to, not least because they need to This issue also sees the usual coverage of developments around act with due skill and care. This duty requires that directors the world as well as recent seminars and other events that the undertake a fair assessment of the environment, acquire Institute has hosted. On developments, importantly, there necessary information, apply their skills accordingly and arrive have been quite a few developments in the Singapore arena at an appropriate decision which is in the best interest of the that directors do need to be aware of. company. There are no immediate answers, but this is a gentle reminder of the responsibilities that come with the position of Finally, the Institute is hosting a major forum for directors a directorship. in November, with a stellar line of speakers and panelists. It is an event not to be missed, least because it explores “how Despite the preceding comments, many companies continue to” issues and focuses on getting it right. You can find more to outperform commercially, whilst maintaining top-notch information on the forum at page 4 of this Bulletin. corporate governance standards. A good and tight board led by very able leaders are amongst the key reasons for this. We It now remains for me to thank the many selfless contributors take the opportunity to present just four companies here - our and the very helpful secretariat of the Institute in pulling proud winners of the BMBA as follows: this issue together. Our call for articles, comments, and thoughts has been bearing fruit and many of you have been • Keppel Corporation Limited very supportive. For that, thank you very much! Do not stop • Singapore Telecommunications Limited and keep them coming - this is after all a Bulletin for you Directors. • Del Monte Pacific Limited • Qian Hu Corporation Limited Kala Anandarajah How do these companies do it? To find out, we asked them, Editor and some of their thoughts are presented in our cover article. Hearing what these Chairmen say suggest that it is not difficult

2 CHAIRMAN’S MESSAGE

Dear fellow members, Warm greetings to all! In this issue of the Bulletin, we have an article on “Winds of Change Over the Corporate Governance Landscape” Since the last issue of our Bulletin, the Institute has continued contributed by our Vice-Chairman, Mr Adrian Chan. This to implement its various programs. In early August, we article looks at the recent changes in the corporate governance officially launched the Board Appointment Service (BAS) landscape in the UK in the aftermath of the financial crisis and Corporate Membership scheme. The BAS has generated and some of the changes we may expect here in Singapore in much interest amongst members and we are hopeful that it view of the latest developments in UK and also in Australia. will provide companies with an additional avenue in their To better understand the latest developments, we will be search for directors, in particular independent directors. The inviting two eminent personalities from the UK to address us new Corporate Membership scheme will enable the Institute at a conference which we are organising. to also engage directly with companies instead of only with directors in their individual capacity. In this regard, the SID Directors Conference 2010, to be held on 15 November 2010 at Marina Bay Sands, will have In mid August, we held the inaugural run of the SID-SPRING as its theme “Getting It Right, The Challenges Ahead”. Executive Development Program, designed specifically to cater Discussions will centre on taking the “right steps forward” in to the needs of SMEs. The program was jointly organised with the aftermath of the global financial crisis. Keynote speeches SPRING Singapore with a special guest speaker from Olam will be delivered by Baroness Sarah Hogg and Sir Richard International Ltd to share risk management experience with Broadbent. Baroness Hogg is the Chairman of the Financial the participants. While in the past the Institute had mainly Reporting Council, which is UK’s independent regulator been focusing its training and development efforts on listed responsible for promoting high quality corporate governance companies’ directors, we are now also focusing on capacity and reporting. Sir Richard is Deputy Chairman and Senior building in SMEs. We believe that all companies regardless of Independent Director of Barclays PLC. The panelists will size will benefit from good governance. For SMEs considering comprise outstanding corporate figures, both local and from IPOs in the near to medium term, sound governance and risk within the region. This conference promises to be a highly management frameworks are important. To actively engage thought provoking event and should be of much interest to SMEs, we intend to start networking activities between our members and the corporate community. More information members and the directors and senior management of SMEs. will be disseminated to members soon. In late August, the Institute held its annual golf tournament at Also taking place in late November is our Annual General Sentosa Golf Club with Mr Lim Boon Heng, Minister, Prime Meeting which will be held on Thursday 25 November 2010. Minister’s Office, as our Guest-of-Honour. The event was very well supported by the corporate community and members We urge members to “save” these two dates and look forward which enabled us to record a useful surplus which will be to seeing many of you at both the Conference and the AGM. used to help fund the Institute’s many activities. I take this opportunity to thank Minister Lim Boon Heng for gracing the occasion; and the various corporations and organizations Warm regards, as well as our members and guests for their continued support John KM Lim of this annual event. I also wish to thank the golf organizing Chairman committee under Mr Yeo Wee Kiong’s chairmanship and the staff of SID secretariat for their hard work in bringing about a highly successful event.

3 SID Governing Council

Chairman : Mr John Lim Kok Min Vice-Chairman : Mr Reggie Thein Vice-Chairman (Designate) : Mr Adrian Chan Pengee Treasurer : Mr Basil Chan Council Members : Mr Keith Tay Ms Kala Anandarajah Mr Boon Yoon Chiang Mr Will Hoon Mrs Yvonne Goh Dr Ahmad Mohd Magad Mr Yeoh Oon Jin Mr Daniel Ee Mr Lim Hock San Mr Yeo Wee Kiong Mrs Fang Ai Lian Mr Willie Cheng Ms Yeo Lian Sim

corporateA must directors for all Monday 15 November 2010

SID DIRECTORS CONFERENCE 2010 GETTING IT RIGHT, THE CHALLENGES AHEAD

A one-day conference organised by Singapore Institute of Directors (SID) Monday 15 November 2010 from 9.00am – 5.30pm • Marina Bay Sands, Singapore

Featuring Internationally Renowned Keynote Speakers

• Baroness Sarah Hogg • Sir Richard Broadbent Chairman of Financial Reporting Council, United Kingdom Chairman, Arriva PLC and Deputy Chairman, Barclays Bank PLC Outstanding Panelists Include

• Mr Choo Chiau Beng • Mr Keith Stephenson • Mr Lucien Wong CEO, Keppel Corporation Partner, PricewaterhouseCoopers Managing Partner, Allen & Gledhill LLP • Mr Piyush Gupta • Mr Vikram Khanna • Ms Yeo Lian Sim CEO, DBS Bank Associate Editor, The Business Times Chief Regulatory Officer, SGX • Mr Peter Taylor • Dr Nik Ramlah Mahmood • Mr Reggie Thein Investment Manager/Head of Corporate Managing Director and Executive Company Director Governance, Aberdeen Asset Director (Enforcement), Securities Management Asia Commission, Malaysia)

SID Directors Conference 2010 looks at”Getting It Right, The Challenges Ahead”. This conference will bring together regulators, corporate leaders, business practitioners and practising professionals to discuss and exchange views on taking the “right steps forward” in the aftermath of the global financial crisis. Critically, there are two specially designed panel discussions, in addition to the keynote speeches and the panel following that, each focusing on the directors’ role in Investor Management and in Risk Management respectively.

Attractively priced as follows: More details about the Conference will be disseminated soon. In the meantime, please contact the SID Secretariat (Tel. 65-6227 2838 or e-mail) to register or for more information. Regular Price Early Bird Price (ends 24 Sep 2010) Registration form attached. SID members $780/pax $700/pax • Sovann Giang : [email protected] • Seok Hwee : [email protected] Non-members $980/pax $880/pax • Gabriel Teh : [email protected] • Florence Lum : [email protected]

4 COVER STORY

Featuring The BMBA Winners What Makes Them Tick And How Do They Do Things Differently For Better Corporate Governance

By Kala Anandarajah Partner, Rajah & Tann LLP & Editor, The Directors’ Bulletin

Conceived in 2005, the Singapore Corporate (BMBA), the Best Investor Relations Award, Best Chief Financial Officer Awards is intended to honour the best in corporate Award, and Best Chief Executive governance at multiple levels of corporate structures. Officer Award - to recognise excellence As noted on the Singapore Corporate Awards in shareholder communication and corporate governance. The Awards website, the biggest reward is the recognition and are organised by BT, supported by honour accorded to companies and individuals for SGX with partners from the following their exemplary achievements in corporate disclosure organisations: and corporate governance, endorsed by the SGX-ST • ICPAS and all relevant professional bodies and institutions • SID associated with the capital market. • Citigate Dewe Rogerson i.MAGE The primary objectives of the Awards implemented and promoted corporate • NUS Business School are as follows: disclosure standards and corporate • Aon Consulting governance in their companies. • To recognise and honour listed • Egon Zehnder International companies and individuals who have • To create a platform for company helped to raise Singapore’s corporate managements to network and share • IMAS disclosure standards and corporate ideas and views on good corporate • SIAS governance through their corporate governance. practices. • Pulses (Official Magazine) The SCA constitute five of Singapore’s • To showcase companies and key key awards - Best Annual Report Award Having completed half a decade of decision makers who have effectively (ARA), the Best Managed Board Award awards presentation, the Singapore

5 COVER STORY

“Critical to achieving high standards of corporate governance is to have an effective, strong and independent board which genuinely believes in corporate governance and actively engages the management.” Dr Lee Boon Yang, Chairman, Keppel Corporation Limited

Institute of Directors (“Institute”) felt CNL: Good corporate governance processes and ensure that all employees it was helpful to have a chat with the ensures key stakeholders interests are comply with these procedures. most recent round of winners in 2010 protected and enhances corporate Critical to achieving high standards – to simply have them share insights performance and accountability. of corporate governance is to have an on how they manage to achieve and SingTel aspires to the highest standards effective, strong and independent board maintain good corporate governance of corporate governance and has put in which genuinely believes in corporate within their organisation. To this end, place a set of well-defined policies and governance and actively engages the the Institute is grateful to each of the processes. management. At Keppel, the majority winning companies for sharing their SingTel is listed on both the ASX and of our directors are independent and views with the Institute. Specifically, the SGX and hence complies with global our directors fully understand that they Institute obtained views from Dr Lee best practices on corporate governance are accountable to the shareholders and Boon Yang (LBY), Chairman, Keppel and disclosure standards. have the responsibility to safeguard their Corporation Limited, Mr Chumpol interests and act at all times in the best NaLamlieng (CNL), Chairman, RCG: Good corporate governance interests of the Company. Singapore Telecommunications means having placed in the corporation Limited, Mr Rolando C Gapud (RCG), a set of processes, systems and policies To assist the board in its oversight Chairman, Del Monte Pacific Limited which govern the way the corporation function, various Board Committees and Mr Kenny Yap (KY), Executive is directed and managed, including were formed to focus on key matters Chairman & Managing Director, Qian managing the relationships among the such as internal audit, risk management, Hu Corporation Limited. stakeholders of the corporation. board composition, succession 1. What do you see as being good KY: I view that as a responsibility and planning, remuneration and safety. corporate governance? duty, especially as a listed company. Each committee has clearly defined People invested in your company and terms of reference. It is through our LBY: Good corporate governance is the the least you can do is to be fair to the Board Committees that our directors institutionalization of proper procedures investors by being transparent and have actively engage the management and and processes such that: reasonably good corporate governance. strengthen governance throughout the • the affairs of the Company will organisation. 2. How do you ensure that the be conducted according to proper corporate governance culture pervades To ensure proper alignment of corporate business, legal and ethical principles; through your organisation? interests with those of shareholders, • reports on the status of the business proper processes and procedures have LBY: First and foremost, at the very are reliable, accurate, and relevant; been put in place by the respective top, the board and management must and Board Committees with the support of uphold the principle that having high management. • the board remains in control standards of corporate governance is when decisions on material issues, in the best interest of shareholders. For instance, to ensure that the including major business ventures or Together, they should put in place development of remuneration policies investments, are sought. proper structures and internal control and fixing of remuneration packages are

6 formal and transparent, remuneration corporate governance practices, policy respective businesses. The respective policies and framework have been statements and standards and makes businesses have their own risk formulated by the Remuneration this code known to Board members champions and committees. Group Committee with the support of Group and employees. The code is reviewed oversight is provided by the Group Risk Human Resources and external HR and updated to reflect changes to the Management Division which assists consultants. To ensure objectivity, the existing systems or the environment in the Board Risk Committee to carry Remuneration Committee comprises which the SingTel Group operates. out periodic review of the Group’s risk- three non-executive directors, two of SingTel’s code of conduct for staff sets related policies and limits to ensure that whom (including the chairman) are out principles to guide them in carrying they continue to support the Group’s independent and the third is a nominee- out their duties and responsibilities to business objectives and address business director of Keppel’s single largest the highest standards of personal and risks adequately and effectively. shareholder, Temasek Holdings. corporate integrity when dealing with The Board Risk Committee, supported Yet another example of how the Board SingTel, its competitors, customers, by Group Risk Management Divison, through the Board Committees engages supplies and the community. The code provides oversight and guides management and assists in ensuring is made available via SingTel’s internal management in the formulation of that proper internal control processes website. risk policies, risk limits and overall risk and procedures are institutionalised, An escalation process is also in place for management framework. With the is the Board Risk Committee. This the Board, Senior Management, and guidance of the Board Risk Committee, Committee assists the Board in internal and external auditors to be kept an Enterprise Risk Management examining the effectiveness of the informed of any corporate crisis in a (ERM) Framework was formulated Group’s risk management system and timely manner. to provide a holistic and systematic guides management in the formulation approach to risk management to better Since 2005, a whistle-blower policy has of risk policies, risk limits and overall been put in place to provide employees prepare the Group to respond to the risk management system. with well-defined and accessible dynamic business environment and To ensure that the Board and Board channels within the Group, including leverage on business opportunities. Committees comprise directors who as a direct channel to SingTel’s Internal The ERM comprises risk management a group provide the core competencies Audit unit and whistle-blower hotline methodology, guidelines and assessment and exercise the independent judgment service that is independently managed templates that are standardised across all required for effective oversight and by an external party for reporting business units. Risk management has direction, the Nominating Committee suspected fraud, corruption, dishonest become an integral part of the Group’s has formalized the process and criteria practices or other similar matters. strategic and budget review exercise, for appointment of directors. To policy formulation and revision, project RCG: It starts with the Board of ensure continued effectiveness, the and investment evaluation, and staff Directors making sure that the policies Nominating Committee has also performance assessment processes. The and principles are clearly communicated formulated processes and criteria for Board Risk Committee also reviews to management and every level of the and monitors the progress of the annual evaluation of the performance organization. the Board and individual directors. Group’s Business Continuity Plans They are assisted by an Independent KY: By setting example. If the top (BCP) implementation, with particular Co-ordinator to ensure confidentiality management is not open to their emphasis on establishing robust plans and constructive feedback during the subordinates, there is no way the entity to ensure that the Group can respond evaluation process. In addition, our can cultivate good corporate governance. seamlessly to external events while Directors are provided with continuing In order to do that, the communication minimising operational disruptions. To education in areas related to their channels in the organization must be improve business resilience, continuous duties and responsibilities. They also effective and multiple. effort is made in scanning for possible regularly conduct site visits to our 3. How is risk managed? Who are your threats, apart from the impending facilities to familiarise themselves with critical people in this regard? pandemic flu threats that might affect the business operations and to meet business operations. LBY: The direct responsibility to with the managers responsible for manage business and operational risks CNL: SingTel’s philosophy and managing such facilities. lies with the people who run the day approach for effective risk management CNL: SingTel has a code of internal to day operations and affairs of the is guided by three key principles:

7 COVER STORY

“Good corporate governance ensures key stakeholders interests are protected and enhances corporate performance and accountability. ” Mr Chumpol NaLamlieng, Chairman, Singapore Telecommunications Limited

• Culture. We seek to build a strong (Please see questions 4 and 5 for the As for the Board’s involvement in risk risk management and control culture critical people in risk management.) management, the Board is assisted by by setting the appropriate tone at the the Board Risk Committee which in RCG: Operationally, the risk top, promoting awareness, ownership turn is supported by the Group Risk management responsibility is lodged and proactive management of key Management Division. To demonstrate with the CFO and the Internal risks and promoting accountability. the intense involvement of the Board Auditor. Together they report directly In short, we seek to promote a risk- Risk Committee in assisting in the to the Audit Committee who then conscious workforce across the Group. management of the Group’s business reports to the Board its findings and and operational risks, we highlight • Structure. We aim to develop an recommendations. below the actions taken by the Board appropriate organisational structure KY: This is a very tricky question. Risk Risk Committee last year in the midst of that promotes good corporate is hard to manage. Overly avoiding the global economic and financial crisis: governance, provides for proper risk makes no business sense and not segregation of duties, clearly defines The Board Risk Committee met six risk taking responsibility and managing risk is irresponsible. The times in 2009 to review the effectiveness authority, and promotes ownership Chairman, all executive directors, of the Group’s risk management and accountability for risk taking. and independent directors must all be system and provide guidance and close involved in discussing risks in all their monitoring as follows:- • Process. We aim to implement robust meetings. processes and systems for effective Review of risk-related policies and identification, quantification, 4. How involved is the board as a limits: The Group’s risk-related policies monitoring, mitigating and whole and the individual directors in and limits were examined to ensure that management of risk. We also seek corporate governance matters and risk policies address the prevailing business to improve our risk management management in particular? risks adequately and effectively and take and internal control policies and LBY: The Board and Board Committees into consideration the then current procedures on an on-going basis to are only as effective as the individual economic climate and risk appetite of ensure that they remain sound and directors who comprise them. In the Group. relevant by benchmarking against Keppel’s context, the Board as a whole Review of significant risk issues and their global best practices. and the respective Board Committees respective mitigation plans. In response Based on these principles, the Group are an integral part of Keppel’s corporate to the dynamic and fast-changing undertakes a continuous process of risk governance structure, and each of our business environment, the BRC identification, monitoring, management directors take very seriously his or her reviewed key risk issues and mitigation and reporting of risks throughout the responsibility of ensuring that proper actions with the Senior Management. organisation to provide assurance to governance processes are in place and Two of the key risk issues addressed in investors and relevant stakeholders. observed. 2009 were:

8 • Risk Management Strategy on ensure that the Group could respond defines 25 categories of risks ranging Cashflow Management: The global seamlessly to external events while from environmental, operational and financial crisis had highlighted the minimizing operational disruptions. management decision making risks. importance of managing liquidity Guidance to Enhance ERM Workplan/ The Group adopts the Committee risks and counterparty credit risks. Initiatives: As part of its continuous of Sponsoring Organisations of the The Board Risk Committee paid review, the Board Risk Committee Treadway Commission (COSO) Model much attention on the risk mitigation provided guidance on new initiatives and the Australia/New Zealand Risk strategies in this regard. Several and proposals to enhance the Group’s Management Standard (AS/NZ 4360) meetings were held with Senior risk management system. The risk as the best practice benchmarks for Management to discuss strengthening management plan was reviewed and assessing the soundness of its financial the Group’s cashflow position and modified in the course of the year to reporting, and the efficiency and enhancing the Group’s resilience to incorporate specific initiatives/activities, effectiveness of its risk management, the credit tightening situation. In as appropriate, to address changing internal control and compliance addition, the Board Risk Committee market conditions. systems. also helped address issues concerning CNL: RCG: counterparty risks. The Board has overall As a corporate body representing responsibility for the oversight of the shareholders’ interests, the board • Impact Assessment and Review of material risks in the Group’s business. takes special interest in corporate Group’s Exposure: Under the guidance The Finance, Investment and Risk governance issues. Individually, as of the Board Risk Committee, Committee (FIRC) assists the Board in members of board committees the impact assessment and stress testing the oversight of the Group’s risk profile members focus on particularly areas analyses were performed. The Board and policies, effectiveness of the Group’s covered by their respective committees. Risk Committee also reviewed risk management system including For example, members of the audit and discussed updates on country- the identification and management committee will focus on the integrity exposure and reports on the political, of significant risks and reports to the of the financial reports, independence economic and regulatory issues in the Board on material matters, findings and of the external auditor and risk countries in which the Group has recommendations pertaining to risk management issues. significant operations. management. The Audit Committee KY: All directors must be involved, Enhancing Operational Resilience provides oversight of the financial especially the financial director and through Business Continuity reporting risk and the adequacy and chairman. Management: The Board Risk effectiveness of the Group’s internal control and compliance systems. Committee reviewed and monitored 5. How much is delegated internally the progress of the implementation of To assist the Board in the identification to management and to external the Group’s Business Continuity Plan, and assessment of key risks within professionals to ensure better with particular emphasis on establishing the business, the Board has approved corporate governance within the robust business continuity plans to a Group Risk Framework which organisation?

“Good corporate governance means having placed in the corporation a set of processes, systems, policies which governs the way the corporation is directed and managed, including managing the relationships among the stakeholders of the corporation.” Mr Rolando C Gapud, Chairman, Del Monte Pacific Limited

9 COVER STORY

“I view that as a responsibility and duty, especially as a listed company. People invested in your company and the least you can do is to be fair to the investors by being transparent and have reasonably good corporate governance.” Mr Kenny Yap, Executive Chairman & Managing Director, Qian Hu Corporation Limited

LBY: Keppel’s corporate governance RCG: Ultimately the implementation key announcements, such as quarterly initiatives are by and large those of of corporate governance principles financial results, major investments and management. The Board and Board and policies within the organization is other business developments. Committees provide invaluable guidance the responsibility of the management. SingTel has a committee at the senior The external professionals such as the in the review and implementation of management level responsible for the external auditor, external counsel and those initiatives. company’s market disclosure policy. other consultants provide the check and CNL: The identification and The policy contains guidelines and balance needed to ensure compliance management of risk is delegated to procedures for internal reporting and with the relevant policies. management which is responsible for decision-making with regard to the the implementation of risk management KY: I believe having a better corporate disclosure of material information. governance is a creation from strategy, policies and processes to There are formal policies and procedures within. Thus a culture of openness, facilitate the achievement of business to ensure that SingTel complies with its being responsible and to ask the top plans and goals. disclosure obligations under the listing management to share those values is The Risk Management Committee, rules of the SGX and ASX. The guiding critical. comprising relevant members from the principle for the market disclosure Senior Management team, is responsible 6. How is disclosure managed; ie policy is that SingTel must immediately for setting the direction of corporate how and when is a decision made to notify the market via an announcement risk management and monitoring the disclose matters? to SGX and ASX any information that is necessary to avoid the establishment implementation of risk management LBY: Press and SGXnet announcements of a false market in SingTel securities or policies and procedures including the are reviewed by management would be likely to materially affect the adequacy of the Group’s insurance before release. The Board reviews price or value of SingTel securities. programme. The Risk Management announcements of more significant Committee reports to the Finance, matters. RCG: First the SGX has clear rules on Investment and Risk Committee matters for disclosure. For these, no CNL: We adopt an open and non- (FIRC) on a regular basis. decisions are required since it is simply discriminatory approach in our a matter of compliance. Beyond the The Group has in place a formal communication with shareholders, the SGX requirements, matters which programme of risk and control self investment community and the media. management thinks will affect the assessment whereby line personnel are We aim to provide relevant, consistent operations materially must be disclosed involved in the ongoing assessment and and timely information - regarding on a timely and balanced basis. The improvement of risk management and the Group’s performance, progress CEO normally makes this decision and controls in selected areas. We engage and prospects – to assist shareholders is reported to the board regularly. external consultants periodically to and investors in their investment review the Group’s risk management decisions. Additionally, we organise KY: Disclosure decision is made framework and processes. investor and/or media briefings for by looking from the shareholders’

10 perspective and asking yourself, if I am Senior Management’s long-term Since 2004, SingTel’s GCEO and the shareholder, should I know this? incentive and remuneration are aligned GCFO have provided assurance to the to shareholder value. The remuneration 7. What guidance can you give to other Board on the integrity of the company’s structure for Senior Management companies to enable them to elevate financial statements, risk management, comprises of fixed, variable, provident/ corporate governance standards compliance and internal control superannuation fund, benefits and long- within their organisations? systems. This certification covers SingTel term incentives. For long-term incentive and our subsidiaries which are under its LBY: Each company has its own legacies under the SingTel Performance Share management control. and operates under slightly different Plan (PSP), there are two categories of circumstances. Hence there is no one awards – General Awards for eligible In line with corporate governance best size fits all approach to achieve higher staff at certain grades and Senior practices, SingTel has appointed a lead level of governance standards. What is Management Awards for eligible Senior director in 2009. The lead director, important is for each company to attract Management Staff. The final number of appointed by the Board, serves in competent, dedicated and independent shares vested to staff will depend on the a lead capacity to coordinate the directors with some domain knowledge level of achievements of targets set over activities of the non-executive Directors as well as wider and relevant experience a three-year period. The vesting criteria to create a strong and multi-faceted are based on Total Shareholders’ Return in circumstances where it would be board. The board should then establish and Economic Profit. inappropriate for the Chairman to serve in such capacity and to assist appropriate board committees tapping Last year, we introduced an annual limit the Chairman and the Board to assure on the competencies and experience of on the total number of shares that can effective corporate governance in directors so that these committees are in be issued under the PSP to no more the best position to advise and work with than 1 per cent of share capital. managing the affairs of the Board and management on the implementation the Company. of sound governance measures. An In our annual report, we detail This year, we introduced poll voting at additional area to consider would be remuneration of the Top 5 senior including corporate governance KPIs executives in actual amounts, compared our Annual General Meeting, to ensure in the CEOs’ scorecard. The key issue to remuneration bands as required that the overall result is a more accurate is buy-in or internalisation of good under the listing rules. representation of shareholders’ votes. governance by employees at every level. SingTel is committed to maintaining SingTel is one of the first few companies This will ensure that a company is able high standards of disclosure and in Singapore to do so. to live up to not just the letters but also corporate transparency. In line with RCG: First the board must clearly the spirit of good governance. timely and relevant disclosure, our articulate what the principles and quarterly results and full year results are CNL: Corporate governance is more policies of good governance are and issued within 45 days, in line with the than complying with a set of rules 45 days requirement for quarterly results ensure that it is communicated to the and codes. It is also about fostering a and exceeding the 60 days requirement organization. Secondly an open line of company-wide culture that strives for for full year results. This is despite communication must be established to disclosure while protecting shareholders’ the Group’s diversified operations provide feedback between management interests. in many countries and the extensive and the board. When formulating our corporate co-ordination with our international KY: Top management must imagine governance policies, SingTel always associates and joint ventures, which looks at best practices for guidance and have different reporting timelines. In what kind of questions shareholders tailors these practices to work within addition, we implemented quarterly have in mind and disclose and answer the SingTel context. Below are some financial reporting since June 2000 those perceived questions as much as examples of such policies we have put in even before it became mandatory in possible. With this attitude, I believe the place over the years: Singapore. standard will be raised.

11 FEATURE

Winds Of Change Over The Corporate Governance Landscape

By Adrian Chan Vice Chairman, Singapore Institute of Directors

Changes to the corporate governance landscape in Singapore Code now requires a strong and independent element on the Board, Singapore are looming on the horizon. The Corporate with independent directors making up at Governance Council, which was established earlier this least one-third, and the Board comprising year, has been tasked to review the adequacy of the a group with core competencies such current Code of Corporate Governance (the “Singapore as accounting or finance, business or management or other relevant experience Code”). In the course of this review, we can expect a re- or knowledge. For banks and insurers, examination of issues such as the tightening of the test the Monetary Authority of Singapore of independence, limiting the tenure of non-executive (“MAS”) has proposed that a director will be considered non-independent after directors and increasing the proportion of independent serving for a continuous period of nine directors on listed boards. If we cast our eyes beyond the years and that the number of independent immediate horizon, what other impending corporate directors be raised from one-third to a governance issues are expected to be debated? majority. These MAS proposals are likely to be seriously considered by the Corporate For the more recent trends in corporate Australian Securities Exchange (“ASX”) Governance Council when considering governance, we can look to the changes also released amendments to the ASX updates to the Singapore Code that apply just implemented in the UK and Corporate Governance Principles to all listed companies here. Australia for guidance. The Financial and Recommendations in June. The UK Code has however changed the Developments in these jurisdictions Reporting Council (“FRC”) published emphasis from 50% independence to a could foreshadow similar developments the new UK Corporate Governance Board having “an appropriate balance in corporate governance in Singapore. Code (the “UK Code”) in May this of skills, experience, independence and year, following a year-long review First, the issue of Board balance and knowledge”. Furthermore, the UK triggered by the financial crisis. The composition has come under focus. The Code now explicitly provides that the

12 benefits of greater diversity (including entities has substantially increased from expressed that annual re-elections could as to gender) should be taken into 5% in 2009, to 24% in the first half of also potentially de-stabilise Boards. consideration when board appointments 2010. In Singapore, such a measure is unlikely are made. The overall focus of the Secondly, the FRC introduced in July to be a cause of great concern within changes to the UK Code appears to this year a Stewardship Code, which the boardroom. With the typical be a move away from the importance is a blue-print to encourage investors of mere independence in itself, to also Singapore listed company having fairly to be more proactive, organized and emphasize diversity. Independence is concentrated shareholding ownership, transparent in engaging with Board still important, but balance and diversity the majority shareholder is not likely to directors, to publicly disclose their have been given more emphasis. The adopt a practice of removing directors policy on stewardship, their voting goal is to encourage Boards to be well without due cause. Even in the UK, records and to protect and enhance balanced and to avoid “group think” by the FRC emphasized that, from 2000 to shareholder value. This Stewardship ensuring that a sufficiently broad and 2009, only 19 directors on the FTSE All Code is apparently the first of its type in varied range of skills and experience can Share Index lost a re-appointment vote. the world and works in conjunction with be called upon. These aims are laudable the UK Code to plug the perceived gap Lastly, the UK Code now requires that, and would be just as welcome in the in corporate governance that emerged in addition to the Board’s own internal Singapore context. during the crisis where institutional annual evaluation of its performance Although the UK Code itself stops investors were felt to have neglected and that of individual directors, the short of setting any specific quotas or their responsibilities as shareholder- evaluation of the Boards of FTSE targets with regard to female directors owners to call Boards to account. It 350 companies should be externally (as has happened in other European remains to be seen whether such a facilitated at least once every three years. jurisdictions), by including a specific code would be relevant in Singapore, While this is no doubt a requirement reference to gender diversity, the aim of where shareholdings are quite often that could serve to independently police the UK Code is clearly to increase the concentrated with major shareholders, and enforce a more transparent and number of women sitting on boards. families or even Temasek, and there effective corporate culture, there may The FRC’s report on the UK Code is generally less institutional investor be some disquiet over its effectiveness notes that, in 2009, women accounted influence. The Stewardship Code and the increased compliance costs that for only 12% of all directors in FTSE nevertheless represents an interesting it will necessarily entail. For external 100 companies. In Singapore, a recent development as it casts the spotlight facilitation to work, the facilitators study published in 2009 states that squarely on shareholders as a vital cog will need to have creditability with the female non-executive directors only that keeps the machinery of governance Board and be appropriately qualified make up 5% of the larger Singapore running smoothly. and established, there will have to be an listed companies. Women directors in Thirdly, a keenly debated issue in the adequate supply of suitable facilitators Singapore have still some way to catch UK has been over the FRC requirement and the Singapore Code should provide up with their counterparts in the West for all directors of FTSE 350 companies guidance regarding the extent of the and improving our gender mix may be to be annually re-elected. In Singapore, review and the relevant criteria for an issue that deserves looking into. directors are currently required to the external evaluation. Although the The changes introduced by the ASX be re-elected only once every three external facilitator can bring greater (that take effect from 2011 in Australia) years. Supporters of annual re-election objectivity to the evaluation process, go even further than the UK. The claim that it will promote greater the external review must also result in recommendations introduced in Australia accountability and engagement between real value being added to the corporate require a company to adopt and disclose the Board and shareholders. They governance process. a diversity policy which should include argue that it will give shareholders an requirements for the Board to establish opportunity to examine the personal At the end of the day, simple compliance measurable objectives for achieving gender performance of individual directors with the Code will not of itself ensure diversity. For now, it seems unlikely that and hold each director responsible for good governance. Ultimately, all of us this approach to achieving gender diversity his own shortcomings. For others, the would wish to be served by more finely will take root in the Singapore Code. The proposal is controversial on the grounds balanced, appropriately experienced Australian approach to gender diversity that corporate governance should focus and competent Boards, which are has already borne fruit – the Australian on the Board’s collective responsibility more accountable to and engage Institute of Company Directors reported and should avoid tempting directors constructively with shareholders. That in June 2010 that the number of women to take a short-term view to appease would be a better measure of effective appointed to the Boards of ASX 200 shareholders. Concerns have been corporate governance.

This article forms part of a series of articles contributed by the Institute to The Business Times.

13 FEATURE

Does Good Corporate Governance Translate Into Higher Firm Valuation?

By Jeremy Goh Associate Professor of Finance, Singapore Management University

This article provides evidence suggesting that assumption underlying a modern capitalistic society is that good shareholders of firms listed on the Singapore governance encourages managers to Exchange (SGX) appear willing to pay a premium make decisions in the best interests for firms with better corporate governance practices, of the owners (shareholders) of the companies they lead. In a recent study, particularly if the firms in question are Government- Bebchuk (2005) claims that the balance Linked companies. of power between owners and managers A decade ago, corporate governance and addressed some of the most egregious is currently too heavily weighted in favor its relation to both shareholder rights failures of the corporate governance of management. He further argues that granting shareholders the power and shareholder value were arcane topics. system. This movement towards better to initiate, as well as to vote on major Since then the media have educated corporate governance is not limited to corporate proposals would improve their audiences through a steady stream the United States. Around the world, corporate governance by placing more of stories, making companies such as investors, regulators and law makers are power in the hands of the owners. Enron, Tyco, Global Crossing, and even demanding better corporate governance Satyam, household names, both for practices. Using US data, studies by Gompers, their apparent insufficient governance Ishii, and Metrick (2003), Bebchuk, structures and their managers’ associated Corporate Governance and Cohen and Ferell (2009), Chi (2005), excesses (Levitt, 2005). Today, topics Firm Valuation and Caton and Goh (2008) provide such as managerial ownership and board empirical support for Bebchuk’s (2005) independence are part of the public Given the push for better corporate thesis by examining the relation between conversation. In 2002, the US Congress governance, defining what constitute firm value and governance structure. enacted the Sarbannes-Oxley Act, which good corporate governance has become Each study finds that firms whose set minimum standards of conduct and increasingly important. The basic shareholders have more power relative

14 to management tend to have relatively Singapore Corporate Development (OECD), I use publicly higher market values. Chi (2005), in Governance Index available information from companies addition, presents evidence indicating listed on the SGX in 2008 to construct What about firms listed on the that causality runs in one direction only, a Singapore Corporate Governance Singapore Stock Exchange (SGX)? In from governance structure to firm value. Index (SCGI). The SCGI is designed the McKinsey Global Investor Opinion He concludes that firms can reduce to measure the quality of the corporate Survey on Corporate Governance agency costs and thereby enhance value governance practices of a company. The (2002), Singaporean shareholders are by granting more rights to shareholders. index is constructed from data collected willing to pay, on average, 21% more from Singapore firms’ annual reports Similar results are reported by researchers for a well governed firm compared to a and Web sites. The actual data collected studying Asian markets. In their study poorly governed firm. In other words, is used to answer questions derived of firms listed on the Hong Kong by improving corporate governance from the Revised OECD Principles of Stock Exchange, Cheung, Connelly, practices at a firm, a firm’s market value Corporate Governance (OECD, 2004). Limpaphayom, and Zhou (2007) find may increase by slightly more than a The SCGI is an equally weighted index empirical evidence showing a firm’s fifth of its original value (see Figure 1). that covers the five aspects of corporate market valuation is positively related to However, as with many studies that use governance set forth by the OECD: its corporate governance practices. Black survey data, there is a concern that the the rights of shareholders; equitable et al. (2006) create a governance score results may be due to a selection bias in treatment of shareholders; roles of card using a survey conducted by the the data. stakeholders in corporate governance; Korean Stock Exchange, and find that A complementary method of testing disclosure and transparency; and firms with higher scores, meaning better the impact of corporate governance responsibilities of the board (see Figure governance, have higher market values. in Singapore that is not subject to 2). These five aspects also cover corporate Research done on firms listed on the the criticisms of using surveys is to governance principles suggested by Thailand Stock Exchange yields similar empirically examine publicly available SGX, and allows for a direct assessment results. These findings are consistent corporate data. To accomplish this, of each firm in each specific aspect of corporate governance. with the notion that better corporate however, it is necessary to find a measure governance practices are rewarded with of the corporate governance practices Out of a maximum score of 100 points, higher market valuation, and it is not of Singapore companies. Following SGX-listed firms average about 64, just a phenomenon observed in mature principles set forth by the Organization while the lowest and highest scores are markets. for Economic Co-operation and 34 and 83 points, respectively. While

Figure 1: McKinsey Global Investor Opinion Survey on Corporate Governance, 2002

15 FEATURE

value. Put simply, a firm with a high Figure 2: OCED 2004 principles of corporate governance Tobin’s Q is more valuable in the market relative to its book value than a firm with a low Tobin’s Q. Relationships between governance practices and performance of Singapore firms are summarized in Figure 5. There appears to be a monotonic relationship between governance groupings and firm performance, suggesting that better governed firms outperform more poorly governed ones. That is, firms with better SCGI scores exhibit higher Tobin’s Q and ROA. In computations not included in the figure, I find that each additional SCGI point translates into an increase of 7% in the market valuation of a firm. Government-linked firms perform better than non-government-linked firm on both Tobin’s Q and ROA, scoring nearly 20% higher and 75% higher, SGX-listed firms score relatively well In order to ascertain the relationship respectively. Unreported regression in equitable treatment of shareholders, between corporate governance and firm results indicate a non-linear relationship disclosure and transparency, and performance, I use Return on Assets between state ownership and Tobin’s Q responsibilities of the board, there (ROA) and Tobin’s Q. The first measure ratios, which suggests that government is much room for improvement in is an indicator of how profitable a linked firms place significant emphasis the other two aspects, especially with company is with assets under control on corporate governance. regards to the rights of shareholders and is a commonly used financial (see Figure 3). Interestingly, the SCGI metric for comparing firms. The second Moving Forward data suggests that government-linked measure, Tobin’s Q, is somewhat more With extensive media coverage companies listed on the SGX follow forward looking. Tobin’s Q is a ratio of sensational lapses in corporate better corporate governance practices of the market value of the company to governance of companies around the than non-state-owned firms (Figure 4). the value of the company’s equity book global and locally, regulators, company

Figure 3: Components of the Singapore Corporate Governance Index (Box Plot)

16 a statistically significant and positive Figure 4: Governance Scores for Government-Linked Companies (Box Plot) relation between the SCGI and firm performance measures. The findings provide support for the notion that better corporate governance practices are consistent with value maximization for SGX-listed firms. At present, however, one cannot draw any inference on the causal relationship between firm performance and corporate governance for SGX-listed companies. directors, and shareholders are looking and whether investors truly place This is due to the lack of long term into ways to improve practices among value on good corporate governance. time-series data. However, a possible publicly listed companies. There are The construction of the Singapore and interesting future study would be those who question whether enhanced Corporate Governance Index (SCGI) to investigate the effect of incremental corporate governance practices will for companies listed in the SGX enables increases in the SCGI and the change in benefit investors and companies, us to examine these questions. I find the market value of the firm.

Figure 5: Relationship between SCGI and firm performance

References:

Bebchuk, L. A. “The Case for Increasing Shareholder Power.” Harvard Law Review, 118 (2005), 833-917.

Bebchuk, L. A.; A. Cohen; and A. Ferrell. “What Matters in Corporate Governance.” Review of Financial Studies, (2009).

Black, B.; H. Jang; and W. Kim. “Does Corporate Governance Predict Firms’ Market

Values? Evidence from Korea.” Journal of Law, Economics, and Organization 22 (2006), 366–413.

Caton, G. L; and J. Goh. “Corporate Governance, Shareholder Rights, and Shareholder Rights Plans: Poison, Placebo, or Prescription?”, Journal of Financial and Quantitative Analysis 43 (2008), 381-400.

Cheung, Y. L; T. Connelly; P. Limpaphayom; and L. Zhou. “Do Investors Really Value Corporate

Governance? Evidence from the Hong Kong Market.” Journal of International Financial Management and Accounting 18 (2007).

Chi, J. “Understanding the Endogeneity between Firm Value and Shareholder Rights.” Financial

Management, 34 (2005), 65-76.

Gompers, P. A.; J. L. Ishii; and A. Metrick. “Corporate Governance and Equity Prices.” Quarterly

Journal of Economics, 118(2003), 107-155.

Levitt Jr., A. “The Imperial CEO is No More.” The Wall Street Journal (March 17, 2005), A-16.

Organization of Economic Co-operation and Development (OECD), Principles of Corporate Governance (OECD, 2004).

17 FEATURE

Concept Of Legal Representative In PRC Companies - A Look At Legal Issues And Related Practical Concerns

In a luncheon seminar organised by the Singapore “Legal Representative” – an individual with broad powers and potentially Institute of Directors held at the Marina Mandarin unlimited liability. hotel on May 21, Mr Tan Chong Huat, Managing What is a Legal Partner of KhattarWong, addressed the practical issues Representative? and safeguard measures which company directors Under the Company Law of China, all could consider when confronted with situations businesses established in China must where companies are involved in disputes and tussles have a legal representative. Simply put, concerning the rights, powers and responsibilities of a legal representative is, a natural person appointed to act on the company’s legal representatives in incorporated companies in behalf. The Civil Law further provides the People’s Republic of China. that it is the legal representative who Many foreign enterprises including with China in various forms such as acts for and on behalf of the company. Singaporean enterprises have established forming a wholly owned enterprise, For foreign investors, it is important representative offices in China as the first joint ventures with Chinese partners to note that it is provided under step of their entry strategy into China. and investing in domestic enterprises. the Company Law that the legal Through a representative office, these representative of a company may be enterprises can engage in a limited range These will in turn allow foreign investors the chairman of its board of directors of activities which form the basis for the to have a long term presence in China or its general manager. For equity enterprise to become further involved and for such entities, they must have a and contractual joint ventures, the

18 designated positions are chairman of representative. Service agreements should the board, and chairman of the board or incorporate undertakings such as the director of joint managerial committee obligation to return company seals upon respectively. It is also required that the termination of the service agreement legal representative be registered with and the legal representative’s duty to company administration authorities. provide full assistance to register a new legal representative, as the immediate Selecting and Appointing a registration of the appointment of a new Legal Representative legal representative with the authority is The selection of the legal representative required. In China, seals are widely used is critical. Companies must select their and recognised by the authorities and legal representative carefully by checking agencies with preference over signatures. their identity and background, and legal The seals used by a company include representatives should be made aware of company seal, legal representative seal the responsibilities and liabilities that and the finance seal. come with the position. Tips for Avoiding Problems company documents and seals. As the legal representative will wield with Legal Representatives • Ensure that the company seals are important powers, it is important kept in a secured location, establish In short, here are some key corporate to exercise prudence and ensure and enforce a transparent procedure governance tips for companies with at the beginning of the formation involving several key position holders respect to legal representatives: of the business that the articles of in various departments for their association sufficiently state the legal • Take extreme care in selecting use which may include the use of representative’s power. Some ways the person who will be your legal logbooks for the purpose of record for include specific limitations expressly representative. any and all transactions. As a policy, set out in the Articles or a general • Ensure that the articles of it is suggested that all seals not be limitation stating that the authority of association sufficiently limit the legal removed out of the office unless with the legal representative is set out for representative’s powers. the board’s specific approval. each transaction as approved by way of a • Take every effort to understand your board resolution. • Resignation documents should be prepared, in advance, for the business in China instead of relying In order to avoid difficulties when legal representative to sign upon on your senior business associates terminating existing, and appointing a appointment. based in China. new legal representative, the audience Different companies have different was advised to consider the execution • Termination documents should preferences for their legal representative: of undated termination-related/ specify the full assistance for some prefer an existing employee, even appointment documents prior to the the appointment of a new legal if no one with Chinese management appointment of the company’s legal representative and the return of experience is available; while others prefer to recruit directly from mainland China. It is preferable that someone highly familiar with the parent company’s culture and – more importantly – who can be trusted completely to be chosen as the company’s legal representative. A director of the parent company is often a prudent choice for legal representative, since they also hold separate duties to the parent company under the laws of its place of establishment. The company may then select a different person with greater local market experience as the general manager for the company’s China operations.

19 FEATURE

• having served as the legal representative of an enterprise that had its business license revoked and was ordered to close down for violation of the law, where he or she bears personal liability for such violation and not more than three years have elapsed since the date of revocation of the company’s or enterprise’s business license; • having a comparatively large personal debt that has fallen due but has not been settled Dealing with a Legal Representative from a When you are dealing with a legal representative Counterparty of a counterparty, it is important to ascertain When you are dealing with a legal the identity of the legal representative and representative of a counterparty, it is the scope of his or her powers via checks on important to ascertain the identity of the legal representative and the scope of his or the counterparty’s business license, articles of her powers via checks on the counterparty’s association and independent searches with the business license, articles of association and company administration authority. independent searches with the company administration authority. For execution of contracts, you may Legal Representative: of the execution period; OR being insist on both the signature and seal Qualifications deprived of political rights for of the legal representative with an committing a crime where not more appropriate resolution of the board or The selected individual must have civil than five years have elapsed since the shareholders as the case may merit. capacity, i.e. be at least 18 years of age. expiration of the execution period Currently, there are no requirements on In conclusion, companies are encouraged qualifications and nationality. However, • having served as the legal to take the necessary precautions to there are preclusions on persons being representative, director or manager of protect their operations in China and selected as legal representatives such as: an enterprise that went bankrupt due their appointed individuals as well as to poor business management and when dealing with a legal representative • having no or limited capacity for civil was liquidated, where he or she bears of a counterparty. The above precautions acts; personal liability for such bankruptcy not only reduce risks, but also help • being under criminal penalty or under and not more than three years have to attract and retain experienced criminal enforcement measures; elapsed since the date of completion expatriate and local managers in China’s of the bankruptcy liquidation; • being wanted by public security increasingly tight employment market. authority or state security authority; • being sentenced to criminal punishment for corruption, bribery, seizing property or disrupting the order of the socialist market economy where not more than five years have elapsed since the expiration of the execution period OR being sentenced to criminal punishment for other crimes where not more than three years have elapsed since the expiration

20 FEATURE

Dos And Don’ts For M&A In China

No matter where you are in the world, the In Ryan’s opinion, in regards to China all these areas are “absolutely critical.” “The fundamentals of the mergers and acquisition process reality is [that] typically, profitability should be the same, and that includes China. The is overstated. And often times, the process is about identifying the value, carrying out working capital, or the liquidity of the due diligence, negotiating the deal, and delivering company is completely misstated.” This often requires you to look for value after completion. alternative ways to assess the value of the These are the words of Ryan Reynoldson, question in a due diligence process is, business. This can be done by asking, partner at KPMG China. He is Head will the deal deliver value? For example, “What is the cost base of this business? of Retail for KPMG China and is also Ryan said, “why has the company What are we actually signing up for? the Consumer Markets line of business got margins that are better than its and how much money is being made, leader for KPMG China’s Transactions competitors and are they sustainable?”. rather than just [taking] margins off the and Restructuring practice. He held a financial statement.” seminar co-organised by the Singapore Common Deal Issues in “When you are doing diligence in Institute of Directors and KPMG at the China China…in one or two days you can Marina Mandarin. probably find out what are the big issues Ryan lists his common deal issues in with the company,” Ryan points out. Due Diligence’s Role in emerging markets: quality of financial Identifying Value “So you can do a lot of the work, assess information, weak internal controls/ a lot of the risk before you spend a lot The fundamentals of due diligence systems, cultural challenges, regulatory of your money,” he added. “And that process should be the same in China compliance, intellectual property, is where I see a lot of the best practices as anywhere else in the world but it ownership structures, tax compliance happening. I think the best of the best is “typically more difficult.” The key and business practices. companies that are acquiring businesses

21 FEATURE

The advice given here is that one needs to understand the business model and business practices in detail as part of due diligence. If you do not, then upon buying a business, you may have to make changes “and all of a sudden you may have lost a revenue stream or some of your suppliers will no longer do business with you”. Tax Compliance In China, tax non-compliance is one of the biggest issues. “If you are looking at private owned companies it is possible that 50%, 60% even 70% of their sales maybe going through personal bank accounts and are not being reported for tax purposes. Tax exposures aside, simply verifying whether such sales are real can be difficult in such cases.” “When you are doing legal due diligence, make “I think the key [issue] on tax is [that] sure you get into the details. The details are very, you are going to have make changes to the business post-transaction. Clearly, very important in China.” transactions are going to have to be Ryan Renoldson, partner at KPMG China brought on the book; you [will] need to be compliant,” he said. Ways to Mitigate Tax in China are really doing it this way.” China may be deemed unacceptable Exposure by foreign companies and may not be Weak Internal Controls/ sustainable in China, as regulations, Valuation and, contractual protection Systems and their enforcement, improve. Such or transaction structure, are helpful, Ryan said that “basically, controls are practices can include kickbacks in although “usually a combination of often weak or non-existent” or they may the supply or distribution channel or both” is needed. The issue in China is be in the form of “manual controls or facilitation payments to officials. “The that voluntary remediation is necessary, punitive controls rather than proper company often has to change business without which, full compliance may not systems.” For example, you could have practices from within,” he said. be possible. a company that has almost no control over inventories, has manual records yet there are surprisingly few inventory losses.” Ryan further stated that one should “understand [that] there might not be a quick fix on day one and you might need to put some stop gaps there initially to make these improvements. One must also understand [that] there will be costs.” Business Practices

Certain common business practices in

22 “You might buy a company and go to the local tax bureau and say ‘OK we have done some bad things in the past, here is a cheque for our past tax underpayments, let’s sort it out.’ But they might not want that money because all of a sudden a lot of tax revenue appears and it begs the question from their supervisors ‘Why was the tax $10 last year and $100 this year?” Ownership Structures The key here is understanding that there is a difference between privately owned companies in China and state owned companies. “When you acquire a business in a state owned company there [are] more procedures involved.” In sum, Ryan’s learning points are that difficult. “When you are doing legal Cultural Challenges one should understand the market, due diligence, make sure you get into understand the regulators, and cultivate the details. The details are very, very “Cultural challenges, [are] perhaps less of relationships with them. important in China.” an issue for a Singapore company going into China than say a US company; there Negotiating and Completing Ryan also advised that it is critical that are still challenges, however, such as a the Deal you know your potential partners – local company’s understanding of, acceptance management or a target’s shareholders in of and readiness for due diligence.” Negotiations in China are often a joint venture or minority investment difficult. There are often gaps in – since reliance on contracts alone Local management talent is also valuation expectations, fuelled by the can be problematic. The problem important. “You cannot necessarily high multiples of listed companies is of enforcement. “You can have a just buy a business in China and then in China. Concerns over regulatory very strong SPA, you can have lots of send people from Singapore to go run it roadblocks, some real and some different terms but at the end of the day necessarily.” exaggerated, can derail talks. Further, you are often down to the local court to On protectionism, Ryan said that whilst rectifying, or agreeing whether there is enforce it”. foreign investment has liberalised, local a need to rectify, non-compliant tax or In terms of delivering the value, a protectionism remains. regulatory compliance issues can prove good due diligence process is just the beginning. You need to develop an integration plan well in advance of closing the deal and commit your best people to ensure its success to make the necessary changes to the business and realize the expected synergies that justified the price of the deal. “If you do a wholly owned investment or a majority owned investment obviously you have more ability to change. But if you are getting into a joint venture or minority investment, it can be quite problematic because you are relying on the local management to make these changes.”

23 FEATURE

Non-Executive Directors’ Fees The State Of The Market

By Jon Robinson Managing Director of Freshwater Advisers Pte Ltd; a company specialising in providing company boards, investors and management with a source of independent and impartial advice on a wide range of compensation issues

The performance of Singapore companies was to increase fees when the economic much improved in 2009 with companies typically environment was still uncertain. Over the last year, only 13% of reporting top and bottom line growth. The variable companies granted some form of equity portions of executive compensation packages have, to NED’s in addition to cash fees. The generally, increased correspondingly. But what about value of these grants was generally in the range S$20,000 to S$70,000 with the fees paid to the non-executive and independent a median value of S$30,000. The form directors (NED’s)? of equity is usually share options despite We have now completed our second As can be seen, NED fees have generally the criticism that options create the study of directors’ fees in Singapore stayed flat over the past years even when misaligned incentives for directors. listed companies. We have reviewed the number of NED’s has increased and Some companies, typically larger ones, fee practices in 334 public companies business performance has improved. provide details of their internal fee including those in the Straits Times Talking with directors, we sense an structures; either showing fees for each Index (STI), FTSE ST Mid-Cap Index unwillingness to ask shareholders individual or a defined fee structure. and companies with at least S$ 100 million in market capitalisation as at 31 Percentile Total Fees (S$) % Inc Average Fees (S$) % Inc December 2009. P10 114,500 -15% 30,000 -21% The table beside shows the total fees P25 153,750 0% 37,500 -3% paid for NED’s as well as the average fee Median 240,000 0% 51,700 0% per NED. We have also compared the P75 387,477 10% 73,723 13% percentile positions to the previous year. P90 684,972 28% 103,961 30%

24 Base (S$) Quartile Fees Relative to Base paid during the year rather than waiting for their fees until after the annual Chair Dpy Chair Lead Ind general meeting. In 2008, only 11% of 24,900 P10 1.5 1.3 n/a companies had this prior approval but 30,000 P25 1.6 1.5 n/a in 2009 the practice had been adopted 45,000 Median 1.9 1.5 1.6 by 20% of companies. We would expect 51,000 P75 2.0 1.7 n/a this percentage to rise sharply in the next 80,000 P90 2.1 1.8 n/a few years; once directors realise that this is acceptable to shareholders then they Base Quartile Additional Fees Relative to Base will shake off their reluctance to ask. (S$) Audit Nomination Remuneration Our advice to boards is that they Chair Member Chair Member Chair Member should have a regular review of their 24,900 P10 0.3 0.0 0.1 0.0 0.1 0.0 fee levels and structures to reflect their growing responsibilities and, where it 30,000 P25 0.5 0.3 0.2 0.1 0.2 0.1 is a regional or global business, their 45,000 Median 0.6 0.4 0.4 0.2 0.4 0.2 fees should reflect broader international 51,000 P75 0.8 0.4 0.4 0.3 0.4 0.3 practice as well as Singapore rates. We 80,000 P90 0.9 0.5 0.5 0.3 0.5 0.3 also believe that boards should carefully consider using equity in their fees with, The practice is to set a base fee for nomination committees will become perhaps, guidance on the amount of NED’s and then specific fees for board more active. equity a director should own. and committee chairmen as well as One area where we are seeing change committee member fees A comprehensive analysis of NED fees is the practice of seeking approval for is available from Freshwater Advisers; A board chairman could expect double fees in advance; directors can then be contact: [email protected] the base fee with an audit committee chairman receiving an additional 60% of the base fee and chairmen of the remuneration and nominating committees getting an additional 40% of the base. Committee members also get paid additional fees: some 40% for the audit committee and around 20% for the other committees. These differences in the remuneration structure are appropriate given the additional work load of committee chairman and audit committee members. However, despite increasing demands placed on audit committees, we are not seeing their fees increasing any faster than general increases. The work of the Corporate Governance Council A board chairman could expect double the base will likely increase directors’ workloads fee with an audit committee chairman receiving and, potentially, the remuneration and an additional 60% of the base fee and chairmen of the remuneration and nominating committees getting an additional 40% of the base.

25 FEATURE

Statement Of Good Practice Appointing Alternate Directors

Introduction An alternate director is generally a person who is appointed to attend Board meetings on behalf of a director of a company when the said principal director is otherwise unable to attend. For Singapore companies, Section 4(1) of the Companies Act defines a “director” to include alternate directors and they are therefore full directors under the law. Nevertheless, the right to appoint alternate directors would have to be provided for in the articles of association of the company. In the absence of such an express right in the articles, the directors may not be able to appoint alternates for themselves. Rights and Powers of would have enjoyed, had the alternate not a shareholder of the company) to Alternate Directors director not been appointed. be his alternate, but the appointment requires the approval of the rest of the The notice appointing the alternate If a company has articles of association Board. Some articles do not require the similar to Article 82 of the standard director should set out and be clear as to Board to approve the appointment of Table A articles found in the Fourth the terms of the alternate’s appointment, the alternate and it is left to the principal Schedule to the Companies Act, the his powers, the circumstances they are director’s discretion. The relevant article alternate director who is appointed to be exercised, any restrictions on his may also provide that the alternate shall be entitled to notice of meetings of authority, the scope of his responsibilities may be one of the existing directors or directors and to attend and vote at such and obligations and his remuneration that a person may not act as alternate meetings, and to exercise all the powers and benefits. director for more than one director of of the principal director in his place. the company. Articles of association are commonly Method of Appointment crafted quite widely to bestow upon the Term of Appointment alternate director fairly broad powers, Article 82 of Table A provides that the rights and authorities at meetings of principal director may by notice in An alternate director continues in directors that the principal director writing appoint any person (whether or office either for a specific period, until

26 he resigns, until his appointment is clear by specifying that the alternate The Nominating Committee can assist terminated by his principal director or director shall alone be responsible to the the Board to review the reasons for such until the appointment of the principal company for his own acts and defaults an appointment and to recommend director is itself terminated. Once a and shall not be deemed to be the agent the appointment of the alternate to principal director vacates his office, his for his appointor. the Board whenever appropriate. It alternate director automatically vacates may well be that the alternate is a Since the alternate director is a fiduciary his office as well. potential candidate being assessed for to the company, he will not find refuge appointment to the Board in his own If the principal director wishes to from his duties at law by following right, is being prepared to assume the remove his alternate, the removal should the directions or instructions of his Board seat outright or is acquainting be effected by written notice served appointor indiscriminately. Alternate himself with the workings of the upon the alternate, with a copy to the directors are obliged to exercise Board and the company concerned for company, and otherwise in compliance independent judgement in the carrying succession purposes. with the articles of association. Some out of their duties and should not articles may provide for the Board to be subordinate their judgements to that More usually, an alternate may be able to remove the alternate from office of their appointors. Alternate directors considered where the principal director by a resolution of the directors. that are appointed should ensure that is expected to be away for a specific period for study leave, medical leave, Alternate directors do not normally they are fully apprised and made aware overseas commitments or other reasons, personally stand for re-election at of the background and history to the Annual General Meetings. If the matters laid before the Board as they but intends to return to resume his appointor is standing for re-election and face and grapple with these issues in duties in due course. If the absence of the is re-elected, the appointment of the their personal capacity while discharging principal director is permanent or for a alternate director would continue. It is their fiduciary and other duties to the significantly extended period of time, the recommended that any resolution put company. absent director should consider stepping before shareholders for the re-election of down and allowing the Nominating a principal director disclose and make it Alternate Directors to Committee and the Board to appoint a clear (in the notice of general meeting or Independent Directors replacement director, rather than have an in the notes thereto) that the principal alternate take his place on a prolonged director has appointed an alternate, who Given that the alternate director is basis. If a principal director is not able will continue in office if the appointor is appointed to be the alter ego of the to commit and give sufficient time and re-elected. The alternate director should principal director, he should in theory attention to the affairs of his company, also be given a full director’s profile in carry out the same role as that of his appointing an alternate is no substitute the Annual Report similar to the other appointor. If, for example, the principal to the principal director’s obligation to directors. director is an independent director for contribute effectively and demonstrate the purposes of the Code of Corporate commitment to his role as director. Remuneration of Alternate Governance, the alternate director that Directors he appoints to attend Board meetings Each Board to Adopt in his absence should similarly be Guidelines The alternate director is not usually independent under the Code. entitled to receive any remuneration For transparency, the Nominating Generally, since independent directors from the company, and the principal Committee and the Board should are called upon to exercise objective director should specify in his written consider adopting clear and specific judgement on corporate affairs notice appointing the alternate whether policies and guidelines for the independently from management and the alternate is entitled to a proportionate appointment of alternate directors are chosen for their specific competence, amount of the remuneration payable by for each individual company. These expertise and experience, one would not the company to the principal director. express policies and guidelines may well ordinarily expect independent directors differ from company to company as Role of Alternate Directors to have to appoint alternates to stand circumstances require. Guidance can, in for them. However, there could be for example, be given on whether there The alternate director is viewed to be certain special circumstances that justify should be a limit on the period of time the alter ego of the principal director, the appointment of an alternate director that an alternate can be allowed to hold and performs a function similar (to for an independent director and it should his appointment, whether there should an extent) as that of a proxy at a be incumbent on the Board to ensure be a limit to the number of directors general meeting. There is however a that these reasons and the credentials of that can have alternates on the Board at significant difference. The alternate the alternate are sufficiently explained any one time and whether the alternate director is a full director and officer of and disclosed to shareholders and the is permitted to attend Board meetings the company himself in the eyes of the investing public when the appointment when the principal director is present. law and owes the same fiduciary duties is made (and also referred to in the The alternate director should in all cases and is subject to the same liabilities to Corporate Governance Report that is be able to add value to the Board in his the company. Some articles make this contained in the Annual Report). own capacity.

This Statement of Good Practice is issued by the Singapore Institute of Directors (the “SID”) purely as a guide for its members and with a view to raising standards of corporate governance. The SID takes no responsibility for the accuracy or completeness of this Statement and the reader should obtain independent professional advice regarding any specific set of facts or issues. No part of this Statement may be reproduced (with or without any alteration or modifications) without the prior written consent of the SID.

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Corporate Governance Developments From Around The World

By Annabelle Yip Partner, Wong Partnership LLP

• Managing conflicts of interest; and • Public reporting and reporting to clients. The purpose of the Code is to improve the quality of corporate governance through promoting better dialogue between shareholders and company boards, and more transparency about the way in which investors oversee the companies they own. The Stewardship Code is available from the FRC site here: United Kingdom listed companies. The Code includes http://www.frc.org.uk/press/pub2306. principles on: html Financial Reporting Council publishes UK Stewardship Code • The monitoring of investee Provision of Non-Audit Services by companies; Auditors and Guidance for Audit On 2 July 2010, the UK Financial Committees Reporting Council (“FRC”) published • The escalation of activities taken to the first Stewardship Code for protect or enhance shareholder value; On 23 July 2010, the FRC published an institutional investors following the updated guidance to audit committees • Collective engagement; publication in May of the updated on determining whether a company’s UK Corporate Governance Code for • Voting policy; auditor should be allowed to provide

28 particular non-audit services. Among board evaluation to explore how well However, many issuers did not disclose other things, the guidance sets out the board is functioning. matters relating to the following how to distinguish between those non- Corporate Governance Principles: The guidance is available from the ICSA audit services which are closely related site here: • Observing and fostering high ethical to an audit and which give rise to a standards, such as compliance with a very low threat to auditor objectivity http://www.icsa.org.uk/assets/files/pdfs/ code of ethics; and those where the threats need more consultations/2010/Higgs%20Responses/ careful consideration. The guidance ICSA%20Review%20of%20the%20 • Building constructive relationships was published for the purposes of Higgs%20Guidance%20on%20 with shareholders, e.g. establishing consultation and is still in draft form. behalf%20of%20the%20FRC.pdf market disclosure, communications and continuous disclosure policies; The consultation document, ‘Revisions and to FRC Guidance on Audit Committees: New Zealand Non-Audit Services’ is available from New Zealand Securities Commission • Considering and respecting the FRC site here: Issues Report on Corporate Governance stakeholders’ interests, including stakeholder relations policies and http://www.frc.org.uk/apb/press/pub2326. Reporting other social and environmental html On 28 July 2010, the New Zealand disclosures. Guidance on Effective Board Securities Commission (“Commission”) Further information is available from Performance published its latest review of corporate the Commission’s site here: governance reporting. The Commission’s On 29 July 2010, the UK Institute review found that many companies http://www.sec-com.govt.nz/new/ of Chartered Secretaries and disclosed relevant information on: releases/2010/2807101.shtml Administrators (“ICSA”) published a draft guidance, “Improving board • board members’ independence, Australia effectiveness”, for public consultation. expertise and experience; The ICSA was asked by the Financial ASIC Releases Guidance on a Director’s • the use of board committees, such as Reporting Council to develop the Duty to Prevent Insolvent Trading remuneration and audit committees; guidance, and it is intended to On 29 July 2010, the Australian complement the new UK Corporate • remuneration policies for directors Securities and Investments Commission Governance Code which was issued in and executives; (“ASIC”) released regulatory guidance May. The recommendations set out in to assist directors to understand and • risk management policies and the draft include the following: comply with their duty under the processes; and • The importance of the board’s role in Corporations Act 2001 to prevent creating a high-performance culture • processes for ensuring external insolvent trading. The guide, Regulatory which maximises the opportunities auditors’ quality and independence. Guide 217 ‘Duty to prevent insolvent for value creation and minimises risk; • The need to create an environment of challenge in the boardroom; • The value of well-informed and high- quality board decision making; • Diversity of psychological types and of personal attributes in board composition; • The advantages of a good training and development program designed to improve directors’ skills experience and knowledge; and • The benefits of regular and bespoke

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trading: Guide for directors’, sets out the following four key principles for directors: • keep themselves informed about the company’s financial position and affairs; • regularly assess the company’s solvency and investigate financial difficulties immediately; • obtain appropriate professional advice to help address the company’s financial difficulties where necessary; and • consider and act in a timely manner on the advice. The regulatory guide is available from the ASIC site here: http://www.asic.gov.au/asic/asic.nsf/ byheadline/10-164AD+ASIC+releases+g uidance+on+a+director’s+duty+to+preve nt+insolvent+trading?openDocument Listing Rule Amendments Changes to Corporate Governance United States The ASX recently amended its Listing Principles and Recommendations Rules as follows: SEC seeks Comment on US proxy On 30 June 2010, the ASX Corporate system • On 4 August 2010, the ASX Governance Council issued an On 14 July 2010, the US Securities and announced that S&P / ASX 300 Index amended Principles of Good Exchange Commission (“SEC”) voted entities must have a remuneration Corporate Governance and Best unanimously to issue a concept release committee comprised solely of non Practice Recommendations. The seeking public comment on the US proxy executive directors. This requirement changes include a requirement that system and asking whether rule revisions will come into effect on 1 July 2011. companies develop and disclose a should be considered to promote greater board diversity policy which should • On 19 July 2010, the ASX announced efficiency and transparency. The SEC’s include diversity as to age, gender, that listed entities will be required to concept release focuses on the accuracy ethnicity and cultural background. It adopt and disclose a company trading and transparency of the voting process, also encourages companies to provide policy on when directors and other the manner in which shareholders and greater transparency of the processes key management personnel can trade corporations communicate, and the which the board adopts in searching for in the entity’s securities. It also issued a relationship between voting power and and selecting new directors to the board. Guidance Note to assist listed entities economic interest. comply with their obligations under Further information is available on the The concept release is available on the this new requirement. ASX site here: SEC site here: The amendments to the Listing Rules http://www.asx.com.au/about/pdf/cg_ http://www.sec.gov/news/ are available on the ASX website here: marked_up_amendments_30_june_10. press/2010/2010-122.htm http://www.asx.com.au/resources/ pdf newsletters/companies_update/archive/ CompaniesUpdate_20100813_0710_ HTML.htm

30 EVENTS

Launch Of Board Appointment Service And Corporate Membership

On 5 August 2010, the Institute officially launched its new Board Appointment Service and its new Corporate Membership scheme at the auditorium of SGX Centre. The event was attended by more than 150 members and guests. In his welcome speech, Mr John Lim, BAS would try to match a company’s Chairman of SID, said that as an requirements/criteria with those of institute of directors, SID had from candidates in our database. He added its very beginning focused on training that the institute would also be able to and development of directors. While it assist companies to evaluate candidates would continue to focus on training, as it has in-principle arrangements with the institute felt that focusing on two global search firms for that purpose. training by itself was not sufficient. The On the Corporate Membership scheme, institute should also assist companies Mr Lim said that so far the institute had to recruit suitable directors, i.e. the only admitted individuals as members “right ingredients”. The institute firmly and felt that there is a need to engage believes that an effective Board is the key companies more holistically by admitting to good corporate governance. companies as members directly. A host Mr Lim said that the new Board of benefits would be made available Appointment Service (BAS) will provide to corporate members. He hoped that companies with an additional avenue in companies, both listed and non listed, their search for suitable directors. The would sign up as members.

31 EVENTS

ensure full and timely disclosure of professional advisers involved at that material information. stage to fully understand the company. Ms Yeo said that directors should make Mr Giang Sovann then took the all efforts to familiarize themselves audience through a presentation on with the companies which they serve, the matching service offered under the in particular its corporate governance Board Appointment Service. A lively framework and controls besides its Q&A session followed. businesses and the environment in SID would like to thank the speakers, which the companies operate. For members and guests for their presence directors joining a company just before and support at the launch and SGX its IPO, they should not pass up the for the complimentary use of the opportunity of working with the various auditorium.

In her speech at the same event, Ms Yeo Lian Sim, Chief Regulatory Officer of SGX, spoke on the important role expected of directors. She said that while the Exchange, as the regulator, can only monitor companies from “outside”, directors, being “insiders”, should play the major role of ensuring compliance with rules and regulation and good governance. The Exchange can only query companies when there is a perceived lack of disclosure while directors are in a better position to

32 EVENTS

Members’ Networking Night

An evening talk on “Are You What You Eat, Do and Talk?” was held on 30 July 2010 at the Waterboat House along Fullerton Road. The speakers were from Parkway Cancer Centre anda certified laugher therapist. Dr Foo Kian Fong, an oncologist, spoke on “Cancer Myths Busted”; Ms Fahma Sunarja, a dietician, spoke on “Stay On Top With Superfoods” while Mr Tom Low, a certified Laughter Yoga Therapist spoke on “Laugh Your pains Away”. Cocktails amongst members and guests followed after the talks. The event was attended by about 50 people and was sponsored by Parkway Cancer Centre. SID thank the speakers, members and guests for their presence and Parkway Cancer Centre for its kind sponsorship of the event.

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34 EVENTS

Risk Management and Corporate Governance for Growing Enterprises

A two-day Executive Development Program jointly organised by SPRING Singapore and SID, to promote good corporate governance in small to mid-cap listed companies, SMEs and privately-owned emerging enterprises, was held from 16-17 August 2010. The program included modules on Enterprise Risk Management, Practical Guides for Effective Boards, M&A Risk Assessment & Successful Execution and Strategic & Financial Risk Management to improve governance. The special guest speaker was Mr Rajeev Kadam from Olam International Ltd who spoke on the Olam experience in risk management and corporate governance. Other speakers included lawyers from Stamford Law Corporation, trainers from Jacob Business Armour, Pacific International Business Associates and Vita LifeLong Learning.

35 EVENTS

The welcome address and opening remarks were given by Mr John Lim, Chairman of SID and Ms Choy Sauw Kook, Assistant Chief Executive of SPRING Singapore respectively. SID thank all the speakers and panelists for their kind contribution; the participants for attending the program and SPRING Singapore for its collaboration with SID.

36 Welcome Aboard June 2010 Chen Yee Seng Colin Low Ming Wah Tan Teck Wei Cheong Tuck Kuan Ed Low Meng Teck Edwin Teah Seow Lian Jane Chew Yow Foo Ong Peng Tsin Teo Zee Vee Chew Mei Kwang Kenneth P’ng Chuen Ooi Thor Chin Keong Chew Keng Keong Petruccelli Paul Vakharia Abbas Chow Kam Wing Seah Kiin Peng Wee Darryl De Bakker Ferdinand Soh Eng San Alvin Wee Koon San Khoo Song Koon Soh Kim Siang Wong Wai Keen Kenny Leong Yung Chee Stornes Leonard Opitz Yen Gary Liew Siow Guan Patrick Tan Suan Jin Yeung Yeok Wah Lim Buay Eng Tan Peng Kwee

July 2010 Ballas Nicholas Peter Lim Woon Cheng Sylvia Ramasamy Dhinakaran Batubara David Lim Kee Hee Tang Fook Cheong Johnson Budge Keith David Lin Song Tay Kim Choon Kimmy Giam Lay Hoon Loo Peng Siang Roger Teng Yeow Heng Michael Hermawan Fridiana Herman Lui Bernard Tivey Graeme Lai Teck Poh Meers Simon Wong Loke Chang Lau Eng Seng Ng Sok Lee Yong Venetia Lim Yoke Hean Ong Seow Eng

August 2010 Ang Ah Lay Kong Wei Li Quek Chiau Liong Aw Siew Juan Krishnamoorthi Shrinivas See Chin Teik Cheah Wee Teong Ramji Smit Peter F. Cheng Woei Fen Levy-Lambert Guillaume Supramaniam Paul Cheung Pui Yuen Lim Choon Wah Tai Chee Yick Chew Tuan Chiong Lim Boon Ping Tan Kian Woo Cullum Simon Lim Vincent Tan Yong Hwa Fong Tony Lin Yan Tan Bian Ee Foo Gerald Lo Siew Whye Tan Young Heng Goh Puay Guan Lye Hoong Yip Raymond Tang Koon Kay Edmund Goo Liang Yin McGrath Paraic Teo Siew Heng Cavin Gwee Choon Guan Paul Milner Winston Terence Williams Maurice Koh Constance Ong Pang Liang

Call for articles, thoughts, snippets, etc. The institute would like to hear from you. Send us aricles, thoughts or even short snippets of issues that you are keen on, that you want to share about, or that keeps you awake at night. It only needs to relate to directors and/or corporate governance. For articles, keep it to 1200 to 1500 words at most. Send your materials by email to the Institute at [email protected]

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