Speech By Mrs Lim Hwee Hua, Minister Of State For Finance And Transport - Luncheon Meeting Of The Women Lawyers Interest Group Of The International Bar Association on 15 October 2007, Ballroom 3, Suntec Convention Centre15 Oct 2007
Mr Fernando Pombo, President, International Bar Association
Ms Gabrielle Williamson, Chair, Women Lawyers Interest Group
Distinguished Guests, Ladies and Gentlemen, Good afternoon.
2. It's not very often that I get to speak on a topic of my choice so I am grateful for the opportunity to do so and for the privilege of addressing this special gathering of women lawyers from all around the world, from fields of expertise as diverse as corporate law, criminal law, and family law.
3. Let me take the liberty of meshing two seemingly unrelated themes - corporate governance as it applies to Singapore and the participation of women in business -so as to share with you developments and trends that are close to my heart.
CORPORATE GOVERNANCE AS PRACTISED IN SINGAPORE
4. There can be no surfeit of literature or debate on corporate governance even as the market place continues to globalize at a frenetic pace and participants are confronted by the challenges of either interpreting divergent practices or harmonising standards and rules across the different jurisdictions, or both. Obviously, the state of an economy would influence the speed of adoption of standards promulgated by more developed markets or the evolution of appropriate standards.
5. This is in many ways the predicament of an open economy and an international business hub like Singapore. We are host to many multinational corporations of diverse origins and home ground rules; and our own Singapore-established businesses have increasingly been expanding abroad. What rules should therefore apply? When do they apply? What happens when the rules diverge or are at odds? These are just some of the questions that we are frequently encountering here, and I believe, in many Asian countries as well, which are opening up their markets, and who are spreading their wings abroad as well.
6. I know only too well that an "M" size label in one country would refer to something quite different in another, and that sizing for fashion itself now employs a great deal of consumer psychology which is frequently country-specific. Regardless of the measurements and the standards, corporate governance should ultimately revolve around more of the substance than form. Furthermore, the principles and standards employed must always be tested for their appropriateness to the business environment at hand. There is a real danger to the blind adoption of rules and standards which might have worked perfectly well in another market.
7. Over the past few years, no thanks to the well-known failures of the likes of Enron and Worldcom, we in Singapore have been caught up with the knotty issues of what new principles and guidelines to adopt; how best to determine an appropriate set of accounting standards and how much disclosure would be necessary.
8. Our conclusion is that it is all about striking a balance between sufficiency of disclosure and practice, and pragmatism. We do not want companies to be overly burdened with compliance. Compliance is the means to an end, that is, good corporate behaviour. We have chosen to be primarily principle-based and will take cognizance of developments in major markets, such as the UK and the US, as a guide when evolving a business framework that is appropriate to our circumstances. For example, we will track closely the introduction of new accounting standards for possible application in Singapore but will be sensitive to possible inconsistencies arising from the different economic or business systems.
9. Sound corporate governance and accountability really boil down to ethics, and we accept that no amount of rules can achieve absolute compliance in spirit. Instead, integrity is all important - integrity in the overall business and regulatory environment, and integrity of the professionals who are service providers. Let me elaborate on some of Singapore's perspectives.
10. Singapore pays a great deal of attention to minimizing sovereign and regulatory risk. The rule of law, a clear definition of the industry and competition framework, a precise statement of tax and other regulations, and a concise articulation of policy intent are part and parcel of the overall scheme of building a trusted hub in Singapore. We understand that uncertainty is a hallmark of doing business anywhere but here in Singapore, we endeavour to build trust by employing consistent policies and ensuring predictable business operating conditions as far as we can.
11. Integrity of the professionals is all important too. The increased emphasis on corporate governance has generated heightened demand for competent and reliable services especially in the areas of law, accounting and finance. Together with the rapid globalisation of the marketplace and therefore of careers, and the evolving prominence of knowledge-intensive businesses, it is not surprising that the role of women in business will take on greater significance going forward.
ROLE OF WOMEN IN BUSINESS
12. Women can participate in various capacities in business - from national policy formulation to championing business initiatives at the industry level to actual participation in business, be it as a shareholder, board director or employee, to being a professional.
13. In order to fully realize the potential of women in Asia, opportunities for education and business participation must rank ahead of other priorities. For without these prerequisites, the results can only be sub optimal. Nonetheless, I believe that with the booming business opportunities sprouting up everywhere, particularly in the fast-growing Asian economies like India and China, more opportunities would be available, whatever the history. Now is the right time for women to make a mark for themselves in the business and corporate world.
14. When I entered politics in Singapore 10 years ago, there were only four elected women Members of Parliament out of 83, or barely 5%. Last year, 17 of us were returned as MPs, out of 84 or about 20%, an encouraging rise in representation that will spur us onto garnering even greater participation. And we would not allow ourselves to be limited to the discussion of 'women's issues'.
15. Within the Public Service, four out of eighteen Permanent Secretaries who head up Ministries are female, compared to just one in 2001. In our Judiciary, more than half of the judges in the Subordinate Courts and a quarter of those in the High Court are women. We now have eight female Heads of Mission.
Entrepreneurs and business leaders
16. Over the years, more women are spearheading business initiatives and taking on an active role in furthering industry growth. Here in Singapore, both women and men are given equal rights and opportunities to be educated and to succeed in their careers. Women here are also making inroads into the traditionally male-dominated occupations, and now make up 38% of managers, senior officials and professionals; as well as 33% of IT professionals.
17. Moving beyond Singapore, there are many examples of successful women of Asian origin who have reached the top of their respective sectors and excelled, such as Ms Indra Nooyi, Chairman and CEO of PepsiCo. In Singapore, we have our own role model in Miss Olivia Lum, who was so driven by her passion to set up her own water treatment business that she sold her apartment and car to raise the necessary capital. Today, Hyflux, the company she founded, is one of Asia's leading water and fluid treatment companies, and is expanding to other countries such as China, India and Africa.
18. With more women pursuing careers and moving up the corporate ladder, it is natural to expect more women to be involved at the highest level of participation, which would be the board of directors for a company. However, the reality is that currently, there is still room for much greater representation of women on corporate boards. According to the Corporate Women Directors International 2007 Report, even though over three-quarters (78%) of the Fortune Global 200 largest companies in the world have at least one woman director on their boards, only 11% of all board seats in these companies are occupied by women. In fact, almost half of the companies with women directors (46%) have only one woman director, which may suggest that some of the women are there as a form of token gesture to equality.
19. In Singapore too, most corporate boards are still predominantly male although I should add that female representation on board seats has been rising through the years. Statistics from the Singapore Institute of Directors show that only 10% of its members are female. Personally, I believe that more qualified women should consider invitations to act as directors so that it would help to expand the pool of available directors in Singapore. Having more women on boards would also help to add diversity and different skill sets.
20. In fact, I read an interesting report a few weeks ago by Catalyst, a corporate research and advisory organization, which showed that Fortune 500 companies with the highest representation of women board directors attained significantly higher financial performance, on average, than those with the lowest representation of women board directors. These results suggest that having more female directors would add value to a company, and actually improve its financial performance! Some countries, such as Norway, have even introduced laws to compel listed companies to introduce female directors, or face closure and other penalties. While I do not advocate such a measure, I would strongly encourage more qualified Asian women to consider acting as directors.
Professionals - female lawyers
21. Let me now move on to the role played by female professionals, specifically female lawyers. I understand that earlier in the day, there was a session on "Glass ceilings and compensation discrimination facing women lawyers", conducted by the Women Lawyers Interest Group. The common thread running through these and other issues is human capital management which is absolutely crucial. We all need to focus on recruiting, developing and retaining talent. Legal firms should recognize that it is to their advantage that they retain and nurture the talents in their firms, whether male or female. For if these lawyers were to leave the legal profession, it would not be just a loss for the legal firm, but also for the country as a whole. As better opportunities beckon, more lawyers are leaving the legal profession to seek greater prospects and/or less stressful work. This trend has been observed in many countries, not just Singapore, and the resultant brain drain has greatly affected the legal profession.
22. As you may well know, Singapore is a small country with no natural resources. Hence, we view our human capital as our greatest asset; we value all the talent that we have, whether female or male. Our meritocratic system is conducive to the nurturing and realisation of potential, regardless of gender. For the record, we are seeing an increasing number of female lawyers being called to the Bar every year, from 112 female lawyers out of a total of 223 in 2003 to 177 female lawyers out of a total of 275 as of September this year. This gives me confidence that more Singaporean women will be entering the legal profession in the years to come.
Juggling Multiple Roles
23. A discussion of the different roles that women can play in business would not be complete without a brief discourse of their social roles. Today, the notion of the traditional role of women has been turned on its head; more women are working, while some men are in turn staying at home and looking after the children.
24. The modern woman is expected to be a Jack, or rather Jill, of all trades, as well as a Mistress of all. In addition to her career, she has to be a loving wife to her husband, a caring mother to her children, a filial daughter to her parents and family, as well as being there for her friends. Speaking as a mother of three kids, I can fully understand how demanding it can be to satisfy all the roles of a woman, in addition to juggling a career and a hectic time schedule.
25. Can a woman have it all? Yes, I believe so and she has to continue to prioritise. For women participating in booming Asia, the opportunities are limitless. I have spoken on the roles of women in areas such as business, politics and law. Governments, businesses and societies that keep a woman down will be the poorer for it.
26. On that note, I hope that each and every one of you here today will seize the opportunity to be all that you can be. With that, I would like to wish all of you fruitful discussions, and please do take the opportunity to explore a bit of Singapore when you have the time. Thank you.