Building up Singaporean management team for fifth schedule companies

Date: 12 August 2013

Parliamenatry Question by Mr Lim Biow Chuan:

To ask the Deputy Prime Minister and Minister for Finance in strengthening our Singaporean core, what plans does the Government have in building up a management team who are of Singapore citizenship for companies listed under the Fifth Schedule of the Constitution of Singapore.

Reply by DPM and Finance Minister Tharman Shanmugaratnam:

Mr Lim Biow Chuan was concerned about building up management teams that are comprised of Singapore citizens for companies listed under the Fifth Schedule of the Constitution of Singapore. He may have been referring to GIC and Temasek, rather than the statutory boards under the Fifth Schedule.

The Government is not a disinterested observer in key management appointments at GIC and Temasek. As shareholder, the Government has a clear interest in the companies continuing to have strong leadership teams. However, the Government does not intervene directly in the management appointments of GIC or Temasek, and it will be ill-advised to do so.

The decisions on key management appointments must remain the responsibility of the respective Boards of GIC and Temasek. They must decide based on the merits and suitability of any candidate. The Government’s role, instead, is to ensure that capable and trustworthy individuals are appointed to the Boards of GIC and Temasek, with the concurrence of the President.

Both GIC and Temasek have strong and robust processes to track and evaluate potential candidates for key management positions. In both cases, candidates are assessed based on their professional expertise and knowledge of markets, leadership skills and alignment with the organization’s core values.

As shareholder, it is also in the Government’s interest to see GIC and Temasek appoint the best persons based on these criteria, so that the organizations can deliver good returns over the long term. At the same time, everything else being equal, when you look at two candidates who are equally suitable, we should prefer to have a Singaporean. The Boards know that these are our broad preferences.

As GIC and Temasek have to manage investment portfolios that are spread worldwide and need a diverse range of knowledge and expertise, it is inevitable and necessary that they would have some non-Singaporeans amongst management. However, a substantial majority of Temasek and GIC’s senior management teams remains Singaporean.

Nurturing a Singaporean core is important not just for GIC and Temasek, but to our enterprises and financial institutions based here. Deliberate efforts have to be put in succession planning and talent development to give Singaporeans opportunities and exposure to nurture their skills, build up experience locally and beyond, so that they can take on larger responsibilities in time to come.