Date: October 1, 2012
|Mr Ravi Menon – Managing Director, MAS
Mr Magnus Böcker – Chief Executive Officer, Singapore Exchange
Mr Hsieh Fu Hua, Chairman, SIAS
Mr Brendan Wood, Chairman, Brendan Wood International
Distinguished Guests from near and afar
Good morning and welcome to Singapore
At this 3rd Singapore Corporate Governance Week and the 4th year SIAS is organisng the Asian Investors” Corporate Governance Conference, I am truly pleased that this Conference has now become a global conference with distinguished speakers and panelists from USA, United Kingdom, Australia, Japan, Hong Kong and various parts of South East Asia.
A great deal of work has been put into improving corporate governance practices in Singapore over the last 10 years. We can be proud of the fact that Singapore has taken the lead in Asia. However, to continue to attract global capital, Singapore must not rest on its laurels but must continue to attain even higher standards to remain globally competitive.
Good corporate governance is not just about financial performance, it is also an important factor in improving social cohesiveness and is an indicator of successful civil societies. Good corporate governance is particularly important in Singapore where our citizens are more likely to own a share directly in a company than their counterpart in the UK, USA or Australia. But for anyone to suggest that the only reason that we must strive for good corporate governance is because it is good for financial performance of a company, is surely missing an important point. If the argument that the only reason for pursuing good corporate governance is that it improves financial performance, then there is a real danger that should the converse be true in a particular circumstance, then do we pursue poor corporate governance for the benefit of the company at the expense of the other stakeholders?
Preponderance of dominant shareholders amongst Singapore listings, create a particular issue and the changing of the mindset of those responsible for governance in those companies is our most important issue.
In recent years, events like the global financial crisis, have highlighted the need for stronger corporate governance in all organisations and in jurisdictions. The objectives of this year”s Conference, therefore, is firstly to raise the awareness of the need for higher standards in good corporate governance practices in Singapore and in Asia and secondly, to evaluate the impact of corporate governance practices in restructuring economies. Thirdly, it will also address, importantly, the time honoured questions whether good corporate governance practices do in fact result in better shareholder value.
At SIAS, corporate governance is one of the key pillars in our vision for building an empowered and enlightened investing community. It is with the investors in mind that SIAS continues to promote good corporate governance practices and standards through various activities. Together with the boards, senior managers, professional institutions and regulators, we have established a good collaborative environment to achieve this objective.
We have put in place initiatives that would spur the boards and senior managements to see value in pursuing good corporate governance practices. Singapore”s achievement in this area to-date could not have been possible without a strong example set by the leadership of the government of the day. In particular, the pro-active stance of the Monetary Authority of Singapore and the Singapore Exchange in providing the necessary regulatory framework and timely reviews to help keep abreast of changes in the corporate governance practices globally, has gone a long way. Nevertheless, the review of Singapore corporate governance standards should no doubt continue with the aim of making Singapore the best in the world.
However, much also depends on the corporate will to rise to the expectations of the investors. Company boards must engage shareholders and provide them with information, even if that makes the board a little uncomfortable. For example, Our research with SKBI-SMU shows that only about 70 out of over 700 companies publish minutes of meetings on their websites and these minutes are often limited to voting results and methods. Without substantive minutes, shareholders cannot participate constructively. The research also reveals that only 33% of the listed companies keep their company news and announcements updated. The website press release is one of the weakest points. There is, therefore, much to be done in the area of timely disclosure.
As more foreign listings appear on our bourse and regulations develop, financial journalists will play even more an important role in empowering the investors with information and analysis. Investors are strongly influenced by media reports for investment decisions. In a recent survey conducted by SIAS and ACCA (the Association of Chartered Certified Accountants), about 73% of the respondents use media reports as their main source of information. I, therefore, urge the financial journalists to develop greater skill in dissecting prospectuses, annual reports and announcements to help investors make more informed decisions.
However, whilst regulators, corporates and financial journalists do their part, shareholders must also play their role in seeking accountability at meetings constructively, responsibly and with decorum. They must adequately prepare for the meetings by developing a good understanding of the company and its performance. We want to encourage investments and not speculation.
SIAS has taken pro-active steps to educate and inform investors. For example, we have developed a pre-AGM analysis on selective companies” annual report on our website to help investors understand the issues surrounding financial statements to empower them and enable them to participate at meetings constructively. A 200 over page annual report is reduced to a 10-20 minutes in-depth analysis video. Also, we have just published a guide on the shareholder rights and will encourage all minority shareholders to avail themselves with a copy. To see all of the things that we are doing at SIAS to help investors and our capital market, please feel free to visit our website.
In addition, whilst SIAS pursues appropriate safeguards for minority shareholders, they must empower themselves with knowledge and information and must take responsibility for their own investment decisions. However, when there is unfair interference with their investments, SIAS will be there to support and advocate on their behalf.
During the next two days, I have no doubt that you will be enthused, entertained and provoked by excellent minds from far and near.
I would like to sincerely thank all distinguished speakers and panelists who come from various parts of the world to participate in this Conference. I also wish to thank the delegates for participating and all our sponsors for their support for the activities of this Corporate Governance Week.
Ladies and Gentlemen, enjoy the Conference and we will see you here again next year.