Temasek Holdings (CEO Replacement)

Date: 23 March 2009

Question No. 933 (by Mr Lim Biow Chuan, MP for Marine Parade GRC):

To ask the Minister for Finance (a) whether he will explain the steps taken by Temasek Holdings to find a replacement CEO; and (b) whether any Singaporeans were considered for the position.

Reply by Finance Minister Tharman Shanmugaratnam:

Mr Lim Biow Chuan asked about the steps taken by Temasek to find a replacement CEO and whether Singaporeans were considered for the position.

Since early 2005 and on an annual basis, a subcommittee of the Temasek Board of Directors has worked with the incumbent CEO to review potential successor candidates. It is a dynamic list - each year, new names may be added while other names may be taken out. The list includes candidates from within the company as well as those from outside Temasek – both in Singapore and abroad. They include Singaporeans, permanent residents and foreigners.

The candidates are grouped according to the time-line for possible CEO succession. This includes those who can be considered for immediate succession should anything unexpected happen to the incumbent CEO. Others are grouped into categories for succession over short, medium, and longer-term horizons. This approach has enabled Temasek to identify excellent future CEO candidates even in their 30s, and nurture them as part of its pipeline of future successors. The process is consistent with the long term perspective that Temasek takes as a professional institution.

The current candidates for future CEO succession within Temasek, mostly in their late 30s or 40s, include Singaporeans as well as foreigners. Temasek looks for candidates who have the commitment and capacity to be with the organisation for the longer term and with a long term perspective in managing and building the institution.

Mr Charles Goodyear was identified and approached by the Temasek Board as a potential CEO candidate in 2007. Once he agreed to be considered as a CEO candidate, Mr Goodyear was interviewed by the Board members, individually and as a group. The Board engaged with him for over a year before it finalised its decision. Temasek picked Mr Goodyear as its next CEO because its Board assessed that he was the best person for the job, based on merit.

The Temasek Board’s selection process was not limited to finding the best investment professional. Indeed, Temasek has internal candidates with very strong investment expertise and track records. However, the Board felt that Mr Goodyear’s strong track record in managing a global enterprise and his experience in running an operating company would complement and add to the depth and capacity of their senior leadership team. The Board was also satisfied that he shares Temasek’s values and is committed to building long term sustainable value.

As Temasek is a Fifth-Schedule Company under the Singapore Constitution, Mr Goodyear’s appointment both as a Board member and as a CEO successor was subject to the concurrence of the President. Cabinet first discussed the Temasek Board’s nomination of Mr Goodyear. Cabinet decided that the Government should have no objection to Temasek appointing a foreigner as CEO if he was assessed by the Board to be suitable and the best candidate available. Cabinet therefore endorsed Mr Goodyear’s nomination, but also reaffirmed the need for the Board of Temasek to remain in the effective control of Singaporeans.

Temasek Board’s recommendation was then put to the President for approval, and the President met with Mr Goodyear before giving his concurrence.