Wanted: Corporate boards that are independent and not risk-averse

INNOVATION is now widely seen as being critical to business success, with companies in Singapore urged to be nimble and enterprising in exploring new opportunities, markets, and capabilities, given the disruptive forces present in industry today.

And, for listed companies particularly, the board of directors play a pivotal role in their long-term success, as the Singapore Code of Corporate Governance notes. The Code, the latest version of which was issued last month, states : "A well-constituted Board fosters more complete discussions, leading to better decisions and enhanced business performance." It expands on the need for a strong and independent Board with a diverse skill set.

Since the Code is framed with business survival and competitiveness in mind, it would be fair to assume that companies facing disruption should ideally have highly independent boards that encourage innovation and creativity to flourish. Unfortunately research suggests this may not necessarily be the case.