Address by Ms Indranee Rajah, Minister in the Prime Minister’s Office, Second Minister for Finance and National Development, at Singapore Institute of Directors 25th Anniversary Gala Dinner on 30 November 2023

Mr Yeoh Oon Jin, Chairman, Singapore Institute of Directors (SID),
Mr Terence Quek, CEO, SID,
Members of SID,
Distinguished guests, 
Ladies and gentlemen, 

Introduction 

1.    It is a great pleasure to be with you here tonight to celebrate a notable milestone - the 25th Anniversary of the Singapore Institute of Directors (SID). 

2.    The anniversary marks a quarter century of SID's work, playing a pivotal role in improving corporate governance and thereby helping to make Singapore a trusted and dynamic place for doing business and investing. SID is an advocate for inclusion and diversity in board compositions. It is also a testament to the visionary leadership and collective efforts of SID members.

Why Good Corporate Governance Matters 

3.    Many will recall that SID started in 1998 in the wake of the Asian Financial Crisis (AFC). Against the backdrop of the financial turmoil that followed the AFC, SID’s mission was to empower board directors and transform boards to be champions of good governance. 

4.    Good corporate governance fosters strong companies which are the cornerstone of a thriving, competitive, and stable economy. 

a. Good corporate governance engenders trust and confidence which in turn attracts investments, boosts economic growth and generates employment.

b. It also strengthens Singapore’s reputation in the global market with all the positive associations that follow. 
 

5.    Conversely, poor corporate governance will usually result in poor business outcomes, possible business failure or even, in more extreme cases, sectoral crises, as was the case with the Global Financial Crisis in 2008 – 2009. 

6.    Poor corporate governance not only impacts businesses adversely but can cause great hardship to employees and their families if salaries cannot be paid, or worse, jobs are lost. Financial losses are easy to quantify, but what is less quantifiable, yet undeniable, is the suffering caused to individuals and the destruction of trust and the damage to society.

a. The recent case of FTX illustrates this. Once among the world’s largest cryptocurrency exchanges, FTX’s sudden collapse was due to a severe failure of governance and controls. The consequences were visited not only on the company but also its employees, shareholders, investors and even the celebrities who endorsed it. It also sent reverberations through the financial and fintech sectors and caused a re-think of the approach to cryptocurrencies.  
 

SID’s Contribution to a Strong System

7.     Fundamentals matter and strong corporate governance is an important fundamental. I would like to commend SID for its role in fostering a strong corporate governance regime in Singapore by: 

• Advancing Thought Leadership and Advocacy; 
• Building Competencies and Capabilities; and 
• Connecting and Strengthening the Ecosystem.

Advancing Thought Leadership 

8.    SID has been a thought leader in matters related to governance and directorship. 

a. SID’s monthly column in The Business Times, called Boardroom Matters, has been compiled into books of the same title. 

b. There are now four editions of Boardroom Matters, including a special 25th Anniversary edition, which I am delighted to launch tonight.
 

Building Competencies and Capabilities

9.    SID has also taken on the role of a capacity-builder by equipping board directors with essential knowledge and skills.

a. Its recent launch of the Accreditation Framework for Directors provides greater clarity on competencies, particularly in vital areas such as digitalisation and sustainability.
 

Connecting and Strengthening the Ecosystem

10.    SID works hard to connect and strengthen the corporate governance ecosystem in Singapore. 

a. The recently launched SID Governance for Good Alliance recognises the key stakeholders in the directorship and governance ecosystem. 

b. Today, the Alliance comprises more than 100 partners including regulators, government agencies, professional services firms, professional bodies, trade associations and chambers, institutes of higher learning and other institutions in the directorship or governance space. 

c. Good governance requires an ecosystem-wide approach and I urge everyone to join this cause.
 

11.    SID has also been actively promoting inclusivity and diversity on boards.

a. Earlier this year, SID launched the Board Readiness Programme to prepare senior executives and professionals for board directorship positions. 

b. The first run of the programme was initiated in collaboration with Singapore Computer Society Women in Tech Chapter, with 27 women leaders currently in the programme.

c. I look forward to seeing these aspiring leaders take up board appointments in the near future.
 

Strengthening Governance Regime Moving Forward

12.    While we celebrate the strides made in promoting good corporate governance, there is more to be done given the evolving global environment and operating context.

13.    One important area of focus is how we can do better to guard against and prevent the use of companies as vehicles for money laundering and terrorism financing.

a. You will recall the recent billion-dollar money laundering case which made headlines and in which reportedly more than $2.8 billion worth of assets have been seized.
 
b. Some other Ministers and I delivered Ministerial Statements on Singapore’s anti-money laundering regime in Parliament earlier in October this year. In my speech, I highlighted the importance of well-calibrated regulatory controls and strong enforcement as well as good corporate governance to deter the misuse of companies and that the government is committed to working with relevant stakeholders to strengthen our AML/CFT regime.   
 

14.    To that end, I am chairing an Inter-Ministerial Committee (IMC) to review our anti-money laundering regime to see how we can further strengthen our regime. One of the areas under review is how to better prevent corporate structures from being abused. 

15.    This includes the approach to nominee directorships, which we had already been studying, even before the recent money laundering case. While there may be many perfectly legitimate uses for such arrangements, they can also be misused for money laundering. We are therefore considering restrictions on such arrangements. We will share our recommendations when ready and we ask for your support in strengthening our system to make Singapore inhospitable to illicit activity, while at the same time conducive to legitimate business.  

Director’s Role in Corporate Governance 

16.    At the heart of effective corporate governance are directors who are entrusted with the responsibility to uphold integrity and accountability. 

17.    Each of you here play a pivotal role in maintaining oversight to steer the organisation towards long-term success while safeguarding its assets, ensuring sustainability and mitigating potential risks. 

18.    I would like to thank SID and all of you for championing the cause of responsible leadership and your continuous efforts in advancing good corporate governance, an uphill task given the constantly changing ideas of industry, technology and global challenges. This safeguards against short-sighted practices, ensuring that integrity, transparency, and accountability remain integral to decision making.

19.    I look forward to your continuing support in the important work of raising the quality of our corporate governance, so as to maintain trust and confidence in our country and our systems, while promoting inclusive growth.  

Conclusion 

20.    In conclusion, good corporate governance fosters a conducive environment for investments and businesses to thrive. Let’s all work together - companies, industry associations, and the Government – to strengthen Singapore's reputation for excellence in corporate governance, and make Singapore the go-to destination for investors and global businesses.

21.    Once again, congratulations on your 25th anniversary and may SID's next 25 years be even more illustrious than the last.

22.    Thank you.