The recent Covid-19 pandemic and the Ukraine war have highlighted vulnerabilities in companies to function in periods of extreme disruptions. While governments were quick to step in the shore up businesses and economies, more needs to be done.
Good corporate governance is a key pillar of open and market-based economies, a global level playing field, and a rules-based international order. Combined with well-functioning capital markets, corporate governance will influence the strength, quality, and resilience of the economic recovery from the COVID-19 crisis.
How will the review the G20/OECD Principles of Corporate Governance address the need to strengthen governance practices in an era of disruptions? How are stakeholders addressing the management of climate change and other environmental, social, and governance (ESG) risks? How should companies manage the impacts of supply chain disruptions?
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Opening Address by Guest-of-Honour
Launch of Corporate Governance Week 2022
On 17 January 2022, Larry Fink, the founder and chief executive of BlackRock, published his annual Letter to CEOs (the Letter), titled “The Power of Capitalism”. The Letter focuses on the importance of sustainability issues to companies from a financial perspective and seeks to highlight the economic benefits of stakeholder capitalism.
Much of the activism we see today is the result of an awakened generation’s desire to be more actively involved in defining what their world will look like. Perhaps in time, these activists would be seen less like barbarians at the gate but rather as crusaders for better governance.
Activist investors also focused on companies’ environmental impact. Companies operating in the energy sector are feeling the most significant impact as climate-driven investors took over board seats in proxy battles at industry giants. Take the case of ExxonMobil Corp and a small activist hedge fund, waging a more than $65 million proxy fight over board seats, and criticizing its lagging approach to cleaner fuels, eventually unseating at least two board members in a bid to force the company’s leadership to reckon with the risk of failing to adjust its business strategy to match global efforts to combat climate change.
For some, the term ESG (environmental, social, and governance) still conjures notions of issues not linked to the financial performance of the company. But given the heightened focus from a variety of stakeholders (including regulators) and the growing understanding of its impact on performance, ESG is a critical topic in the boardroom.
How are boards addressing the issue of ESG and performance? Does the board have oversight on management’s ESG agenda? Is the board responsible for ensuring that the company’s ESG strategy appropriate, takes account of material risks, and is likely to deliver results? How does the board ensure that management is engaging its stakeholders effectively? Beyond investors, which groups of stakeholders is the company accountable to?
The COVID-19 pandemic has bared open vulnerabilities of traditional supply chains, with certain critical industries being caught off-guard and now dealing with major and minor shockwaves. Trade tensions between the US and China have driven entities to further rethink their supply chain strategies, providing an added impetus for Southeast Asian opportunities. The Ukraine war has also driven commodity prices to new highs, coupled with disruption in supplies.
From holiday toys and software chips, to raw materials including food and lumber, few companies escaped the impacts of supply chain disruptions. Many took action. They invested in the supply chain as a resiliency-growth enabler, diversified suppliers and manufacturing across geographies, gained greater end-to-end supply chain visibility, and used data to be more responsive to demand. How then did companies still encounter such massive supply chain disruptions?
Businesses dependent on global sourcing are facing hard choices in crisis management amid the supply chain disruptions. But in planning to mitigate the risks of similar disruptions in the future, they confront other questions that have no easy answers: Should they broaden their supplier choices, or do more local or near-shore sourcing? How much inventory of raw materials, sub-assemblies, and finished products should they stock to tide over the crisis?
Ranked by the World Bank as Asia’s top logistics hub for 10 years in a row, Singapore offers world-class connectivity to the region and beyond. The unprecedented boom in regional cross-border trade and consumption strengthens Singapore’s relevance as a secure, highly efficient logistics and supply chain management hub. Thus, disruptions are a major blow to the development of Singapore and the region.
How is supply chain governance compared with corporate governance? What are the potential pitfalls to be overcome as well as ways of building future strategies, new investments, capabilities, and evolving supply chain models in these key sectors? What is the role of internal audit and how can it help overcome supply chain disruptions?
Good corporate governance is a key pillar of open and market-based economies, a global level playing field, and a rules-based international order. Combined with well-functioning capital markets, corporate governance will influence the strength, quality and resilience of the economic recovery from the COVID-19 crisis.
The crisis has revealed or exacerbated pre-existing weaknesses in corporate governance and capital markets, such as the management of risks, including supply chain, health, climate change and other environmental, social and governance (ESG) risks, and the insufficient resilience of companies to unanticipated crises. The crisis also shed light on major shifts in capital markets, including the declining number of listed companies, particularly in advanced economies, meaning fewer companies were able to access equity markets to navigate the crisis, and the lower number of growth companies accessing public markets.
Against this background, the G20 and OECD have agreed to review the G20/OECD Principles with the aim of strengthening them, in particular by adapting relevant elements to the post-COVID-19 environment, taking into account any structural effects of the crisis on capital markets and corporate governance practices, and supporting corporate sector resilience.
How would the revisions in the G20/OECD Principles improve corporate governance and capital market policies? How can it play the important role in achieving broader economic objectives with respect to financial stability, investor confidence, capital formation and capital allocation? How can it improve the conditions for companies’ access to capital from public equity markets, especially in times of disruption and crisis? Provide better conditions to access to equity markets for sound businesses can help strengthen the balance sheets of viable corporations? Support the green and digital transitions essential for long-term resilience?
End of Conference
Register now and join us for the Corporate Governance Conference as we discuss several timely topics for industry professionals and companies. In this four-day event, registrants will gain insight into companies’ environmental impacts, supply chain strategies, board diversity, and internal audit function.Get your tickets