DBS needs a strong candidate to succeed chairman Peter Seah. Here’s why

[SINGAPORE] Is more leadership renewal imminent at South-east Asia’s largest bank, DBS ?

Earlier this year, Tan Su Shan took over as chief executive from Piyush Gupta, who helmed the bank for more than 15 years.

With DBS chairman Peter Seah now in his late 70s, might there be another major change soon, should the bank appoint a successor? 

Seah has been a director since November 2009 and chairman since May 2010. Being a chairman for over 15 years is a long time. It may be timely for Seah to hand over shortly, to a younger person who brings a different perspective. This is especially as Tan has had time to settle into her CEO role.

For the 2024 financial year, Seah’s total remuneration was about S$2 million for his non-executive role. 

Given the prestige of chairing the Republic’s leading bank and annual remuneration exceeding that of many CEOs of Singapore-listed companies, expect qualified candidates from DBS’ board of directors as well as outside the group to be interested in succeeding Seah.

Possible candidates

Among internal candidates, lead independent director Olivier Lim – a board member for about eight years – may possess the requisite expertise and is familiar with DBS. Or, could Judy Lee, who has been on the board for more than four years and has experience in the financial sector, become DBS’ first female chairman? 

While Seah was a banker for 33 years before retiring as vice-chairman and CEO of the former Overseas Union Bank in 2001, the list of previous chairmen of DBS include leaders with rich public-sector experience such as S Dhanabalan, the late Ngiam Tong Dow, J Y Pillay, the late Howe Yoon Chong and the late Hon Sui Sen. 

Former deputy prime minister (DPM) Heng Swee Keat could be a prime catch as DBS’ next chairman. Heng has served as minister for finance and managing director of the Monetary Authority of Singapore. Another former DPM, Wong Kan Seng, is UOB’s non-executive chairman.

On reflection, does the identity of DBS’ next non-executive chairman matter?

After all, the day-to-day work to ensure different parts of DBS work well together, risk is appropriately managed, banking relationships are well looked after, investor engagement is good, performance targets are met, the technology platform is robust, and staff morale is high is largely the job of Tan and her executive leadership team.

Indeed, Tan’s predecessor Gupta received much of the credit for DBS’ strong performance over recent years.

Nonetheless, while a non-executive chairman should not be micromanaging or interfering excessively in the work of the executive management, he plays a vital role at a complex organisation with big ambitions such as DBS.

Prized qualities

Besides helping to ensure the board works harmoniously, corporate governance standards are upheld, and executive management is performing, among others, an incoming chairman of DBS can hopefully contribute effectively in two areas in particular.

First, a financial group operating in various geographic markets needs to be adept at handling geopolitics. This is especially as banking is a tightly regulated industry and a bank’s customers encompass both businesses and individuals.

Today’s geopolitics is defined by hot superpower rivalry between the US and China, with countries forced to choose sides. Multilateralism is faltering and nationalistic forces could be growing fiercer. Competition among countries acting in self-interest for scarce resources might intensify.

Will populist forces push governments of various countries to be tough on foreign banks to protect local people and businesses? Possibly, an effective DBS chairman can work assiduously behind the scenes to help manage relationships with political leaders and industry regulators across various markets.

Amid increasingly messy geopolitics, a chairman who can effectively champion DBS’ interests while winning friends, whether when working behind the scenes or under the public glare, could be invaluable.

Second, it’s vital for DBS’ next chairman to be a strong strategic thinker.

While DBS has a capable executive management team, a board who can help get strategy right – including adapting strategy to changing circumstances – is a must in a world undergoing turbulent change, be it from technological disruption, growing power of artificial intelligence (AI) or upheavals in the global trading system.

After all, a management team, no matter how competent or energetic, often will not have the luxury to indulge in blue-sky thinking or take a longer-term view due to the sheer volume of work and urgency of near-term problems.

Strategic issues facing a bank today can range from what markets or business lines to focus on, whether to pursue transformative acquisitions, how to serve older or lower income customers, how to leverage the power of AI, how to embrace sustainability effectively and so forth.  

A board that can help DBS get its strategy right creates great value for its shareholders, be it through stronger financial performance, business resilience, share price performance or corporate reputation.

Under Seah’s tenure as chairman, DBS has largely flourished. Nevertheless, board renewal matters, including for the chairman.

As DBS’ current financial year draws to a close, the time looks right for Seah to pass the baton soon at the bank. A new chairman will inherit a competent board and lead an organisation with a deep management bench that is consistently churning out enviable financial results.

Still, DBS needs effective leaders at all levels to navigate what will be much tougher terrain ahead. May this pride of Singapore appoint as its next chairman a leader with strategic vision and geopolitical nous.

The writer owns shares in DBS