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Corporate governance serves as the backbone of a business

Companies with strong corporate governance practices are able to maintain high levels of trust and satisfaction among customers and stakeholders

Our emphasis on corporate governance has helped us to maintain high levels of customer trust and satisfaction, says Mr Seah.

We notice that counterparties and partners are more inclined to deal with a company with good corporate governance record, says Mr Boon.

Our firm commitment towards corporate governance has been integral to building investor confidence, says Mr Tan.

Our emphasis on corporate governance has enhanced the confidence of our partners, shareholders and other stakeholders, says Mr Sim.


  • Peter Seah, chairman, DBS Bank
  • Boon Swan Foo, chairman, non-executive director, Global Investments Limited
  • Tony Tan, CEO, CapitaLand Mall Trust Management Limited
  • Sim Wing Yew, CEO, Vicom

Moderator: Vivien Shiao, correspondent, The Business Times

Q What are some key goals that you have for your company, and how will your focus on corporate governance help you achieve them?

Mr Seah: With our roots as the former Development Bank of Singapore, being purpose-driven has always been part of our DNA - to create value for the long term, by managing our business in a balanced and responsible way. This also underpins our commitment to create a sustainable future that goes beyond banking.

To achieve that, having strong corporate governance is paramount. At DBS, our corporate governance framework is anchored on competent leadership, effective internal controls, a strong risk culture, and accountability to stakeholders. The board plays a key role in setting governance standards. Our leadership model also ensures an appropriate balance of power, accountability, and independence of decision-making across the group.

Good corporate governance ensures we always conduct our business in a fair and ethical manner, considering the interests of all our stakeholders to achieve long-term and sustainable growth. It also entails effective risk management, which is more relevant than ever in an age of digitalisation as issues related to data protection and cybersecurity come to the fore. DBS has been commended for our digital transformation journey, and we have been able to reap the rewards of our investments in digitalisation in part because of the initiatives we have put in place to mitigate the risks involved.

Mr Boon: We aim to consistently deliver long term benefits to all stakeholders (i.e. beyond the interest of shareholders) and contribute to the community and economy as a whole. Global Investments Limited (GIL) adopts the Code of Corporate Governance 2018 and Sustainability Guide issued by Singapore Exchange Limited.

The board reviews and approves the company's risk management and internal control framework. The board is well informed of the company's activity and works together with Singapore Consortium Investment Management Limited (SICIM), the manager of GIL in setting the right direction and defining risk tolerance limit and realistic goals for the company.

Mr Tan: As Singapore's first Reit and largest retail Reit, CMT is committed to deliver stable distributions and sustainable total returns to our unitholders. To achieve this, we depend on the continued support of our unitholders, business partners, tenants, shoppers and employees, with whom we share the fruits of our labour. Our focus on corporate governance has helped us to gain the trust and goodwill of our stakeholders, whose support we rely on to execute business strategies and initiatives that achieve operational excellence and deliver CMT's long-term strategic objectives.

Mr Sim: One of the key goals is to drive business transformation to stay competitive by leveraging on technology. With a well-diversified board, we would be able to leverage on fresh perspectives and cross-industry insights to facilitate our business transformation efforts.

Q: How has your business reaped the benefits of your emphasis on corporate governance over the years?

Mr Seah: Our emphasis on corporate governance has helped us to maintain high levels of customer trust and satisfaction. We have seen stronger profitability across the board - in 2018, DBS' net profit increased 28 per cent to a record high of S$5.63 billion. DBS also ranked highly in customer and employee satisfaction indexes in 2018. We placed first in Euromoney's Cash Management Survey for Global Overall Best Service and were named an Asia-Pacific Best Employer by Aon Hewitt. We have also been recognised as a well-run bank, being the only bank in the world to hold three of the world's best bank titles at the same time. In addition, we were recently named Safest Bank in Asia by Global Finance for the 11th consecutive year.

Mr Boon: Good corporate governance practice has enhanced the working relationship and understanding between the manager and the board. Our independent directors engage with shareholders beyond the AGM. They have directly addressed and resolved institutional shareholders' queries via tele-conference. The independent directors also hold separate meetings with the internal auditors and external auditors. It has allowed clear, timely and transparent disclosures to shareholders and has built shareholders' trust and confidence in the company.

We have also won several corporate governance awards including Best Managed Board Award, which serves to boost the morale of the team and enhance GIL's standing with our regulators. SGX and ACRA helped us to fast track our re-domiciliation process from Bermuda to Singapore last year.

Our high governance and transparency index scores sends a clear signal that the board places a high emphasis on corporate governance. We noticed that counterparties and partners are more inclined to deal with a company with a good corporate governance record.

Mr Tan: To achieve long-term success, businesses must demonstrate that they are committed to enhancing long term unitholder value and have the appropriate people, processes and structure to provide a strong foundation for a trusted and respected business enterprise. Our firm commitment towards corporate governance has been integral to building investor confidence.

In recognition of our efforts, CMT is listed in the FTSE4Good Developed Index, FTSE4Good ASEAN 5 Index, iEdge ESG Leaders Index, iEdge ESG Transparency Index, STOXX® Global ESG Leaders and Global ESG Governance Leaders. CMT also retained its 5 Star rating in the 2018 Global Real Estate Sustainability Benchmark (GRESB) Real Estate Assessment. Such external validation enhances the appeal of CMT to investors who favour companies with strong corporate governance characteristics.

Mr Sim: Our emphasis on corporate governance has enhanced the confidence of our partners, shareholders and other stakeholders in us. This strengthens our identity and credibility, and helps us achieve long-term sustainable business performance.

Q: Could you share some key initiatives that your company took to improve corporate governance in recent years?

Mr Seah: In line with our efforts to maintain high levels of transparency and accountability to our stakeholders, we continue to look for ways to enhance our corporate governance disclosures.

For example, the DBS Board has elected to adopt Rule 710 of the SGX Listing Manual in advance. This requires Singapore listed companies to describe their corporate governance practices with specific reference to the 2018 Code in their annual reports, for FY2019. DBS has chosen to do this ahead of the given timeline, so descriptions of our corporate governance practices for FY2018, with specific reference to the 2018 Code, were included in our 2018 annual report.

We have also taken active steps to initiate board renewal, as we are mindful of the need for a good balance between continuity and fresh perspectives.

Mr Boon: We have appointed a lead independent director since 2016 and have rejuvenated the board in 2019. In the process of searching for independent directors, the Nomination and Governance Committee had engaged service from external parties. We have recently appointed two new independent directors and a female director to the board to enhance effectiveness and improve diversity of the board in terms of skill sets, race and gender.

We have also reviewed and analysed the industry-wide data on directors' remuneration for different categories of listed companies to that ensure our directors' fees are compatible with the median director fees of the small cap companies.

Mr Tan: We believe in upholding corporate transparency standards to deliver timely, concise and accurate information to the investment community. To this end, CMT has in place a unitholders' communication and investor relations policy to promote regular, effective and fair communication. We also recognise the importance of diversity across expertise, gender and experience and intend to put in place a board diversity policy. In April this year, CMT appointed our first female chairman, Teo Swee Lian. CMT has also complied with SGX's new sustainability reporting requirements and included a board statement to demonstrate our commitment.

Mr Sim: We recognise the merits of diversity as an aspect of corporate governance, and have been working hard to renew and diversify our board. As part of the board diversification and renewal process, we appointed five new independent non-executive directors to the board since 2017, including two female candidates. Thirty per cent of our board members are now female.

Q: What is the most pervasive myth about corporate governance that you believe should be debunked and why?

Mr Seah: Much has been written and debated that the cost of compliance and corporate governance is too high. My view is that good corporate governance practices are rewarded by the market, and go a long way in enhancing the overall value of an organisation. Institutional investors are willing to pay a premium for companies with a good track record of strong corporate governance, with the expectation that they will get better returns from improved stock performance.

Companies should view investments in corporate governance as an opportunity to mitigate risk, improve the brand and ultimately generate returns.

Mr Boon: The most pervasive myth is that corporate governance is merely about following a checklist and ticking boxes. While this may demonstrate awareness of the criteria set out in the Code of Corporate Governance and the willingness or desire to adopt the best corporate governance practice, it is not sufficient for a company to achieve good corporate governance.

Most importantly, it is in the spirit of the board to implement fair rules to serve all stakeholders for the benefit of the company, community, environment and its employees. For GIL, the board discusses the rationale and practicability of the recommended governance practices extensively before implementing it.

Mr Tan: Corporate governance is not simply a check-the-box exercise. Companies must be guided by strong fundamentals and a robust corporate governance culture to ensure sustained performance across economic cycles and industry transformations. For a robust corporate governance culture to take root, all levels of leadership in an organisation, starting with the board and the senior management, must walk the talk and take responsibility in adopting ethical business practices.

Mr Sim: We believe corporate governance is not just about going through the motions, but can add real value to the business. To illustrate, from undergoing our board diversification and renewal process, we noticed that the increased diversity in voices and perspectives have led to improved board discussions and decision-making.

Q: What has been your biggest challenge in incorporating corporate governance best practices and how was this overcome?

Mr Seah: We believe that effective safeguards against undesirable business conduct must go beyond a "tick-the-box" mentality. In addition to relying on published codes of conduct approved by the board, we also advocate various organisational safeguards to maintain a strong risk and governance culture. These include regular and consistent communications by senior management to set a clear tone from the top, enhancing employee on-boarding training to reinforce risk awareness, and incorporating the DBS Code of Conduct into our compensation evaluation process for employees, to motivate and encourage desired behaviour.

Mr Boon: The biggest challenge would be cost and resources. Certain corporate governance practices such as the engagement of shareholders through town-hall meetings, big scale road shows, electronic online voting scheme or seeking independent assurance on sustainability report which are common for large cap companies could be too costly for small cap companies like GIL.

We endeavour to uphold the spirit of transparency and engage our shareholders by uploading material announcements and analyst briefings on our corporate website. We have a designated IR officer to reply shareholders' queries via email or hotline and the register of shareholders' queries is submitted to the board on quarterly basis.

Mr Tan: Excellence in corporate governance is an ongoing journey. The challenge is in striking the right balance between complying with the substance and spirit of the Code of Corporate Governance while maximising returns and creating value for CMT's unitholders.

Building a strong and sound corporate governance culture requires the support from all levels of the organisation. It is important for the board and management of any organisation to demonstrate their commitment and promote the right values to build a strong corporate governance culture. We will strive to continually improve our standards of governance and transparency, as well as engage our stakeholders in the process.

Mr Sim: Talent identification in the board diversification and renewal process - it takes time to identify candidates with the desired competencies and attributes of the Board, taking into account our business and strategic objectives. As such, we plan ahead and give ourselves sufficient time to undertake this process.


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