Giving shareholders the full picture

Boards must go beyond mere box-ticking and bring about a cultural change that emphasises shareholder rights, says DAVID GERALD

Published Sun, Oct 20, 2013 · 10:00 PM
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CORPORATE governance failures can be disastrous. The inglorious Enron and MCI (formerly Worldcom) scandals of the early 2000s resulted in bankruptcies that wiped out US$250 billion of shareholder value. During the 1997 Asian financial crisis, Korean "chaebols" caved in after years of excessive risk-taking and borrowings to drive ambitious growth plans.

Closer to home, companies in Thailand, Indonesia and Malaysia suffered losses after assuming hefty debt denominated in foreign currencies when their own currencies collapsed. Singapore shareholders, too, have not been spared, especially with corporate governance issues relating to S-chips.

Shareholders today are more active in monitoring the companies they invest in and vigilant about corporate governance practices. They place their hard-earned monies in companies and expect the boards and managers entrusted as the stewards of this money to act in their interest and provide information in a timely manner.

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