Date: October 5, 2010
MR DAVID GERALD’S WELCOME ADDRESS – 11TH INVESTOR CHOICE AWARDS DINNER – 5TH OCTOBER 2010
MS TEO SWEE LIAN, DEPUTY MANAGING DIRECTOR, MAS
1. Distinguished Guests, Ladies and Gentlemen
2. A warm welcome to all of you this evening. Thank you for your support to SIAS.
3. We are pleased to know that Singapore has regained the top position in corporate governance and we congratulate our corporates, regulators and investors for this achievement. This is good for Singapore but we cannot sit on our laurels. The need to improve Singapore’s standard of corporate governance to meet the increasing expectations of investors is a continuous one. Singapore, therefore, must continue to improve and adopt higher standards in order to achieve high global standing and become a leader in global financial markets.
4. With this in mind, together with our industry partners, we have launched the Inaugural Singapore Corporate Governance Week 2010. We are indeed delighted that Boardroom, CPA Australia, the Big four accountancy firms and two leading law firms, had readily accepted our invitation to be part of this ambitious programme. We are providing the platform for all concerned parties to come together once a year to exchange, update and compare standards and best practices.
5. We would like to thank the 81 companies who have pledged to uphold and improve corporate governance. It is a good start and quite encouraging. SIAS will continue with this annual campaign to create greater awareness of the need to maintain the highest corporate governance standards.
6. Tonight we are honouring 57 companies who have excelled in corporate governance and transparency practices. These corporates have shown outstanding conduct in their dealings with shareholders. SIAS applauds them.
7. We have just ended a one and a half day Conference, and I am pleased to say that it was a success with strong endorsement from OECD. 450 participants from Asia, United Kingdom, Australia, United States and Europe attended. The discussion over the last two days has been enlightening. We discussed, how the corporate governance landscape is changing after the global financial crisis and on how the crisis affected the various financial markets in Asia. There were in-depth debates on how regulators, corporate practitioners, company directors and officers and auditors, need to respond to these changes.
8. How do we prevent another financial crisis? Much has been discussed about the roles of corporate governance practitioners. What about the regulators and the shareholders? Professor Piman from OECD Roundtable humorously hit home the point. He said: a two-year old toddler can be safe in a playpen. The parents can have the assurance that he is safe from danger. If the parents were to put him out of the playpen, he asked would the child need more supervision or inside it? In his closing remarks, Prof Walter Woon highlighted the fact that shareholder too need to be vigilant as they can be more effective monitors than the regulators.
9. Whilst legal frame work is being strengthened by regulators, investors must also play their part. According to OECD, investors have a key role in promoting good corporate governance. They must attend meetings, seek accountability and engage company management constructively. The role of investors cannot be ignored. In a recent OCED report on Corporate Governance and the Financial Crisis 2010, the importance of active shareholder involvement and ongoing dialogue between companies and investors is viewed as highly beneficial to the development of corporate governance.
10. SIAS would like the current corporate governance practices to be further strengthened by companies adopting the following:
- The OECD standards on investor rights
- Greater independence on the board
- Independent directors taking greater interest in minority shareholders’ rights and protecting their interests
- Strengthening director competency to provide effective participation in board matters; and
- providing greater independence to the internal auditor making him directly responsible to the board
11. Given the history of numerous corporate scandals, SIAS calls on internal auditors to be pro-active and vocal in times when needed. Internal auditors should take a leaf out of what Cynthia Cooper, the WorldCom internal auditor, did by not thinking twice about blowing the whistle. The internal auditors there went to great extent to preserve the integrity of the incriminating evidence and ensured that the culprits were brought to justice.
12. Finally, I wish to thank our Guest-Of-Honour, Ms. Teo Swee Lian and our distinguished guests for gracing this event, our Sponsors for the event, Singapore Exchange, our listed company friends for sponsoring tables, CMC Markets being the Sponsor for the Financial Journalist Year Award and SingTel for sponsoring the prizes for the Financial Journalist award, Australian Wine Index for providing the wine for tonight’s function, all supporters and endorsers of the awards.
13. Thank you and enjoy the evening