Keynote Address By Ms Indranee Rajah, Minister in The Prime Minister’s Office, Second Minister For Finance and National Development, at the Singapore Corporate Awards, at Parkroyal Collection @ Marina Bay, The Garden Ballroom, 17 November 2021

Ms Wong Su-Yen, Chairman of Singapore Institute of Directors,

Mr Kwa Chong Seng, Chairman of Singapore Exchange and Singapore Technologies Engineering Ltd,

Mr Wong Wei Kong, Editor of The Business Times,

Mr Kelvin Tan, Secretary of the Institute of Singapore Chartered Accountants,

Distinguished guests,

Good afternoon to all of you.

Introduction

2. I am delighted to be able to join you in person today, and of course those joining virtually as well, at the Singapore Corporate Awards.

3. First, let me begin by congratulating all awardees who will be honoured today. This year, we are recognising companies that have upheld good corporate governance amidst the COVID-19 pandemic, with the Corporate Excellence and Resilience Award.

4. The pandemic has presented challenges for companies on many fronts. Coping with local and global disruptions, managing uncertainties and volatilities, are but the tip of the iceberg. Good corporate governance provides the foundation for companies to adapt their strategies to the changing landscape.

5. Today, I would like to share a few ideas that companies can put into practice to not only survive, but thrive in the present landscape, with good corporate governance as the bedrock.

a. First, strengthen resilience to create long-term value within the organisation.

b. Second, transform and embrace change from the external environment.

c. Third, partner the Government to build a stronger and more vibrant economy together.

Strengthen Resilience to Create Long-Term Value

6. As a result of the pandemic, companies are facing new and complex issues, with more difficult decisions to make. Let me give a few examples.

a. A strong remuneration package remains a key factor to retain talent and achieve strategic outcomes. But this can be a tough balance during the pandemic where many companies’ profits have been affected. You might have seen a recent article published by the Singapore Institute of Directors on The Business Times on measures that can improve remuneration governance. I urge companies to continue practicing good corporate governance and stewardship in your remuneration policy.

b. Dividend payment decisions – whether to maintain, reduce or suspend pay-outs – need to be well-considered to manage the corresponding signalling effect and shareholders’ expectations.

c. Layoffs might have been inevitable for some companies to right-size and restructure themselves in response to new challenges and opportunities.

7. Resilience is critical in the face of these challenges, as companies strive to create long-term value.

a. McKinsey & Company identified six dimensions of resilience – organisational, financial, operational, technological, reputational and business-model resilience.[1]

b. Boustead Singapore, one of the award winners today, has displayed resilience in several dimensions. When lockdowns occurred, it quickly applied a technology-driven approach to integrate remote working arrangements into workflows. It continued to deliver value to stakeholders, made possible by its credible reputation, diversification strategies and long-term investments in people and technologies.

8. An organisation however can only be as effective as its people and the resilience of companies also depends on the resilience of their employees. Hence, I would also like to talk about mental resilience and employee well-being, especially against the backdrop of the pandemic.

a. We are almost two years into the new norms COVID-19 introduced us to. With reduced social interactions, uncertainties over livelihoods and disruptions in work arrangements, employees are facing pressures on many fronts – not just at the workplace, but also at home. Before they are workers of an organisation, they are also family to their loved ones.

b. I would encourage companies to always pay attention to the mental health of your employees, and even more so during this time. I urge you to take active steps to support your employees and promote mental health in your organisation.

c. While there have been challenging aspects of work brought about by the pandemic, it has also demonstrated that work can be done differently. Employees largely appreciate the element of flexibility in these new ways of working.

d. Employee-centric companies should design their HR policies and work processes around employee needs and values. I encourage you to do so as we prepare ourselves for the post-pandemic way of working, which is likely to be a hybrid model with the need for flexibility.

9. Companies which take care of their employees’ needs are much more likely to be able to recruit and retain good workers, enjoy high productivity and morale and become resilient companies. Such companies can also better anticipate and respond to disruption, which brings me to the next point on transforming and embracing change.

Innovate, Transform and Embrace Change

10. The economic shock brought about by the pandemic has intensified the need to transform and embrace change along the way.

11. With barriers to digital adoption broken down, companies should continue your efforts in digital transformation, chart your organisation’s digital agenda and manage digital risks.

a. Capitalising on digital means helps companies to eliminate redundancies and build digital presence. Where possible, I encourage companies to collaborate to adopt new technologies and fast-track commercialisation of innovations.

b. Digital expertise is also fundamental to help companies make data-driven decisions and enhance business outcomes. Last year, a survey by the Institute for Management Development (IMD) Centre for Future Readiness found that companies with digital experts on the top team performed better amidst the pandemic.

12. Another emerging trend is environmental, social and governance (ESG) considerations.

i. With the global pandemic, natural disasters and effects of climate change, investors have placed increasing importance on ESG matrices. Since 2018, all Singapore listed companies have been required to publish an annual sustainability report.[2]

ii. I am glad to learn that the Sustainability Reporting Review 2021 found an increase in the overall score for reporting performance by Singapore companies, from 60.6 points in 2019 to 71.7 points this year.

iii. Companies should continue to improve the quality of your disclosures and embed ESG commitments in your business and investment decisions. By addressing the interests of your investors and key stakeholders, you can inspire confidence and brand value.

13. ‘Sustainability and Digital’ is also one of the judging criteria for this year’s Awards. Micro-Mechanics (Holdings) Ltd, one of the award winners today, has embraced both sustainability and digitalisation. It has set up committees to measure performance in ESG factors, and actively seeks like-minded suppliers who adhere to sustainability practices. It was also an early adopter of digitalisation and automation, which proved most beneficial during the pandemic.

14. I hope this inspires all of us to make invested efforts to keep pace with both sustainability and digitalisation.

Partner the Government in Building Our Economy

15. The Government will continue to support companies on our path to economic recovery, with global growth projected to remain positive in 2022.

16. At Budget 2021, we set aside $24 billion over the next three years to enable firms and workers to transform and emerge stronger from the pandemic. Budget 2022 will build on this, to enable our corporates and workers to continue to seize new opportunities in digitalisation, innovation and in the green economy. We will target support at our SMEs and more vulnerable mid-career workers.

17. The Government cannot do this alone, and we welcome your feedback and suggestions. Our public consultations for Budget 2022 will be starting soon. I encourage all of you to co-create Budget 2022 with us, by actively participating in these consultations.

Conclusion

18. To conclude, our challenges today are complex. Companies need to be resilient, adaptable, and seize opportunities to emerge stronger and meet the challenges of the future economy.

19. I hope that all of you will continue to be champions of good corporate governance, leading examples of innovation and key players in building a better economy for Singapore.

20. I would also like to thank the Institute of Singapore Chartered Accountants, the Singapore Institute of Directors and The Business Times for organising the Awards, which has promoted and raised Singapore’s corporate governance standards since 2005. Once again, I congratulate all award winners and wish everyone a pleasant afternoon ahead.

21. Thank you.

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[1] Source: Article by McKinsey & Company titled ‘The resilience imperative: Succeeding in uncertain times’, dated 17 May 2021. Accessed at https://www.mckinsey.com/business-functions/risk-and-resilience/our-insights/the-resilience-imperative-succeeding-in-uncertain-times ↗ (opens in new tab)

[2] Companies were given up to 12 months from the financial year ending 31 December 2017 to issue their first sustainability report, i.e. by 31 December 2018. Source: Article by PwC titled ‘SGX Sustainability Reporting Guide’, dated June 2016. Accessed at https://www.pwc.com/sg/en/publications/assets/sustainability-reporting-sgx-2016.pdf