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Bite-sized articles on corporate governance and directorship matters
“Boardroom Matters” is a regular column by the Singapore Institute of Directors (SID) in The Business Times and its online portal, BT Invest. The column carries articles on corporate governance and directorship matters penned by SID council and committee members. Since the first article appeared in January 2014, more than 200 have been published and compiled into three book volumes to date.
Willie Cheng wrote several articles for Boardroom Matters. They are listed here with other corporate governance articles, except for those already in the book Doing Good Better.
Corporate governance – why bother?
Corporate governance is crucial, but a core difficulty is the corruption of power. The ensuing rules to safeguard against wrongdoings have focused too many boards on compliance and not enough on their performance role of value creation.
One and two-tier governance systems
Like most Commonwealth countries, Singapore has a one-tier governance structure that puts executive and non-executive directors together on a single board. In contrast, countries like Germany separate the two types of directors. Some nonprofit organisations in Singapore have found the two-tier model useful.
Are Singapore boards killing value?
A Bloomberg columnist’s criticism of Singapore boards is not borne out by the numbers or cross-country comparisons. But he raises several relevant points for Singapore directors to take a good hard look at ourselves and our roles.
Opportunities in the Covid-19 crisis
Even as companies deal with the disruptions brought about by the pandemic, there are many opportunities to ride in this dangerous wind. As black swan events of this nature become more common, companies must embed strategic thinking into their business models to be future-ready.
The effective board
The ideals of an effective board are not found in the regulations. The effective board is one that emphasises performance rather than just conformance. It focuses on values as well as value. And it should strongly support as well as challenge management.
Will the truly independent director please stand up?
Independence is a state of mind. The regulatory tests of blood and money are inadequate for determining independence. The challenge is for every director to be professional and have the moral courage to rise to the occasion and be truly objective and independent.
The 9-year rule – Independence or renewal
The Nine-Year Rule for director independence was meant to encourage board renewal. However, it often ends up achieving neither. If renewal is to achieved, either the rules or their implementation must change.
Is gender diversity actually good for boards?
Gender diversity is being relentlessly pushed. The oft-championed argument that it improves company performance does not pass muster. Instead, the valid argument may be social justice for women who are disproportionately under-represented on boards.
Charities accounting requires charity
It has been some years since the simplified Charities Accounting Standard was introduced. However, most Singapore charities still use the well-weathered Financial Reporting Standards in their financial reporting. There are good reasons why they refused to change.
Bring back conservatism
Fair value measurement and other accounting standards seek to reflect the real world and ensure equity across generations of investors. However, in the process, they have eroded the age-old principle of conservatism and resulted in volatile and, in some cases, unrealistic financial statements.
Auditor rotation – is it time?
Auditor rotation – is it time? Auditor rotation can enhance the independence and effectiveness of the audit. But it is also time-consuming and disruptive. Whether regulators mandate it or not, boards should establish a policy that recognises the systemic risk of retaining auditors indefinitely and the other mechanisms for achieving
Boardroom Matters
Available in three book volumes
Since the first article appeared in January 2014, more than 200 have been published and compiled into three book volumes to date. To buy these books, visit Singapore Institute of Directors.