Date: September 26, 2019
The Hon’ble Deputy Prime Minister and Minister for Finance,
Mr Heng Swee Keat
Dr Tony Tan Keng Yam, Former President of Singapore and Chief Patron, SIAS
Patrons of SIAS, Dr Stephen Riady and Mr John Lim,
Chairman of SIAS, Mr Daniel Teo
Chairman SGX, Mr Kwa Chong Seng,
Mr Ong Chong Tee, Deputy Managing Director MAS
Distinguished guests, Ladies and Gentlemen,
Deputy Prime Minister, thank you indeed for making the time to join us tonight amidst your busy schedule.
In the blink of an eye, 20 years have passed. After the dust had settled on CLOB in 2000, many questioned the need for SIAS to continue. What else has SIAS to offer, they asked. Many predicted the demise of SIAS. What could SIAS offer investors on an ongoing basis? Should we carry on? How will we fund SIAS? The strong advice to me was to return to legal practice and close down SIAS. That surely would have made my life easier. I was at a cross road at age 55.
The Companies and senior management were also not sure of us. They saw us as a CLOB club only and nothing more. The Regulators were, quite understandably, at arm’s length from SIAS and left us to find our own way forward.
Notwithstanding the above, my first committee and I took the challenge and decided to forge our own path forward, come what may.
During my CLOB campaign, meeting CLOB investors regularly all over Singapore, I discovered that very few had any knowledge of the fundamentals for making sound investment decisions. Singapore needed investor education. SIAS, we decided, will fill the gap.
Transparency standards in listed companies were sorely lacking, with boiler plate disclosures. Access to financial information was also not readily available unlike now. So, we pushed for greater transparency and introduced the “Most Transparent Company Award” in year 2000 at our very first annual dinner.
Arising from the Asian financial crisis, OECD took the lead to issue its first guidance on good corporate governance principles and Singapore introduced its first Code in 2002. It was not prescriptive. In order to encourage listed companies to adopt those practices, SIAS pioneered the introduction of the one and only Singapore Corporate Governance Award in 2003.
The lack of an organised body to represent the interests of minority investors in Singapore prompted me to carry on. Fortunately, I had (and continue to have) a supportive team behind me that would stand with me to build up SIAS. And that we did.
The Way Forward
My experience in the early 1970s in the labour Ministry, taught me first-hand, the benefits of tripartism at work in the industrial relations landscape. The trade unions, employers and the Commissioner for Labour worked together to resolve labour disputes, most of the time, amicably, avoiding strikes for more than 40 years.
I decided and recommended to my committee that it would be best for SIAS and Singapore to adopt similar tripartite approach to investor relations issues. We, therefore, deliberately decided that resolving issues in the boardroom and not the courtroom would be our primary modus operandii to achieve success. We felt strongly that this approach would help Singapore’s economy, its capital markets and its investors by focusing on value preservation and minimising disruption. We put Singapore first.
Major Milestones of Last 20 Years
Allow me now to briefly highlight the core initiatives of SIAS through the years.
1. Investor Education
In March 2000, we decided to embark on investor education and took our programmes to the heartlands. To-date, SIAS has organised over 1,400 investor education programmes ranging, from basic investment seminars for novices to certificate courses for more advanced investors.
More than 200,000 retail investors have so far benefited from these programmes that are offered largely free of charge. We have been able to provide many of these programmes to Singapore citizens by forging partnership with MoneySense, SGX, People’s Association, ABS, financial institutions and listed companies. Our programmes are made freely available to all Singaporeans by both physical and online modes.
2. Corporate Governance
For us, tonight’s event is the most prominent one, being the only Singapore Corporate Governance Awards. By rewarding good practices, we strive to motivate companies to raise their standards of governance. This will help the public make better investment choices. In the past, our award winners have even outperformed the STI Index.
The other important initiative, which is now gaining regional and international recognition, is our annual Corporate Governance Conference, which is supported by SGX, ACRA, OECD and attracts participation from international governance experts. Singapore corporate governance practitioners, boards and senior managers and regulators are updated on the latest best practices globally. We just completed this year’s conference, which was a great success and thoroughly engaging.
3. Investor Rights
Finally, the unique approach that SIAS has adopted to resolve disputes amicably between investors and companies, stays true to our ethos of “in the boardroom, not the courtroom’’. Over time and after much effort, shareholders have now come to realise that differences are best settled through SIAS with logic, reason and compromise founded on sound arguments and negotiation, instead of belligerence and confrontation.
In order to improve accountability and governance, SIAS saw the need to pose questions on governance business strategies, and financial statements on every annual report with the hope of improving annual general meetings and the engagement between the board and shareholders. To date, we have sent over 1000 sets of questions to about 600 companies.
However, when we have to, we are prepared to take on companies unwilling to cooperate. Examples would include NatSteel, Singpost and Sino-Environment. More recently we sent 34 probing questions to the board of troubled water treatment firm Hyflux, a move that surprised many.
Our tripartite collaborative approach is more relevant now than ever. Companies are regularly approaching SIAS to discuss the best way forward, especially in corporate actions. SIAS helps companies to engage with shareholders on our platform in a more meaningful manner. The recent financial woes of several oil and gas companies saw the active involvement of SIAS helping with the stakeholder engagement and even in restructuring efforts.
Where Is SIAS Today
We have gained trust in the local capital market and we now serve on the SGX’s Listing Advisory Committee and the MAS’s Corporate Governance Council. Beyond Singapore, SIAS also sits on the Asian Corporate Governance Roundtable of the OECD and the Advisory Committee of the International Forum of Independent Audit Regulators.
In 2009, I was awarded the SGX Special Achievement Award for championing individual investor’s interest which I attribute to the support my colleagues and the team at SIAS have given me. In 2010, SIAS also won the Gold Standard Award from Public Affairs Asia. In 2014, we received a special achievement award for championing individual investors’ rights from the Minority Shareholder Watchdog Group, surprisingly from Malaysia.
Our approach has been recognised by overseas regulators and we have been requested to share our experience with some of them. In 2018, we assisted Thailand’s Securities Exchange Commission in conducting a Corporate Governance conference.
Today SIAS is a Charity and an Institution of Public Character (IPC).
What Next For SIAS?
In a world full of constant changes and upheavals, investors need sound information and guidance to navigate the difficulties. SIAS is there for them. We are now assured of continuity by the support of MAS, which has agreed to provide funding for SIAS. We are grateful and a big Thank You on behalf of all investors in Singapore.
Now that the long term funding is secured, let me share briefly how SIAS intends to remain relevant in the future.
i) Expanding corporate governance to embrace sustainability (extending to ESG)
Investor interests globally on environmental, social, and governance (ESG) issues have finally reached a tipping point. SIAS will do more by incorporating sustainability questions into our questions to companies on the annual reports and also help shareholders understand sustainability reports and ask the right questions, especially in the areas of risk disclosures. Sustainability reporting should be an integral part of the annual report and no longer be a side show.
ii) Embracing technology for investor education and equity research for wider reach
Today, how the millennials consume information has changed. SIAS too, must continue to evolve and develop the way we interact with and provide information to this new generation of investors. We are looking to develop digital tools to maximise our engagement with the investment community of all ages.
We also plan to re-start equity research on companies much needed by retail investors, and provide guidance to them. This will widen our reach to help more investors invest wisely.
iii) Advancing investor rights – to be proactive and not reactive
We will increase our interactions with companies so as to be more proactive in advancing investor rights in Singapore. We will commence by engaging companies to publish their responses to our questions on their annual report and track companies conducting corporate actions, for example general offers and delisting to ensure that rights of minority shareholders are advanced. Nevertheless, we will continue with our tripartite approach of resolving issues “in the boardroom, not the courtroom’’.
A Word of Thanks
I sincerely thank our distinguished Guest of Honour, Mr Heng Swee Keat, Deputy Prime Minister and Minister for Finance, for gracing tonight’s celebration. Our deepest appreciation to all our donors, sponsors, endorsers, supporters of the Corporate Governance statement and supporters of tonight’s event, our 20th Anniversary Celebrations and our 10th Corporate Governance Week programmes.
I must also express my thanks to MAS and SGX for recognising and supporting our unique role in addressing the issues facing investors.
Last but not least, I owe a personal debt of gratitude to the team at SIAS, past and present for their hard work, dedication and commitment. We have worked together to make SIAS what it is today. We took the road less travelled and forged our own path and I like to think that twenty years on we are stronger than ever and even more committed to making a positive difference for Singapore.
Thank you and enjoy the evening.
