Episoder
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How is one to manage A.I.'s disruptive threat to our industry?
If we see that A.I. is but the latest in the stream of technology to do so, we appreciate how history provides instructive lessons in the value of Governance in handling change.
In this podcast, we explore what happens when the Singapore's postal giant , SingPost, confronts the future where most communication is done online and the use of post goes into terminal decline.
How does poor Governance handicap a firm in its transition? Is a recovery possible?
In this podcast, we have the distinct pleasure of chatting with Prof Mak of NUS, a keen observer of SingPost and its travails.
Useful Time Stamps
00:01 - 16:30
SingPost's Disruption, M&A Scandals and Governance
16:30 - 53:17
Interview with Prof Mak on Insights into SingPost and Singapore's Governance Landscape
Show Notes
Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf -
Hyflux has been an icon in Singapore, with its collapse being a shock to many. It had also caused the loss of millions of dollars within the Singaporean investing community.
What governance lessons can we derive from this? In this podcast, Prof Mak (NUS), an esteemed Corporate Governance expert, generously shares deep insights on the firm and the Singaporean governance landscape.
This podcast will be especially helpful to students of governance (shout out to the CA Singapore candidates) and those interested in how governance plays out in the Singaporean/Asian context.
Useful Time Stamps
00:01 - 10:30
Hyflux's Reasons for Collapse & Governance Issues
10:30 - 52:01
Interview with Prof Mak on Insights into Hyflux and Singapore's Governance Landscape
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Manglende episoder?
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Wow, if you listened this far, that’s definitely an accomplishment! As podcasts go, of course there would be some episodes that we got distracted and it just became “white noise” – I’ve had that often! So feel free to re-listen to this!
It's been a pleasure delving into the intricacies of Singapore’s Corporate Governance Code with you. My goal was a simple one it's to help make learning the Code a little bit easier amidst our very busy lives.
I also wonder if you noted the improvement in audio quality throughout the podcast journey well making a podcast was a lot more difficult than I thought a lot more technical and audio engineering these were things way out of my domain but it was a fun learning journey for me.
What’s next? Well, remember we spoke of illuminating the value of the provisions via stories of firms? That’s the next goal, to bring you stories that really impress on us how vital corporate governance is to a firm’s success and even its survival. That is one big endeavor, stay tuned!
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 13.3 says,
“The company maintains a current corporate website to communicate and engage with stakeholders
Is this possibly the simplest provision to comply with? But quite a few comply by having a website, yet do not comply with the spirit of the provision.
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 13.2 says,
“The company discloses in its annual report its strategy and key areas of focus in relation to the management of stakeholder relationships during the reporting period.”
This now appears within the Annual Reports and the Sustainability Reports. How so?
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance
3) Singtel Sustainability Report
https://www.singtel.com/content/dam/singtel/about-us/sustainability/reports/Singtel-Group-Sustainability-Report-2022.pdf -
Stakeholders can be very powerful and in some situations, can lead to companies being boycotted or even shut down by the government.
Provision 13.1 says,
“The company has arrangements in place to identify and engage with its material stakeholder groups and to manage its relationships with such groups.”
But who are our “material stakeholders” and, bluntly put, who are “immaterial”?
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Principle 13 touches on a strongly trending issue - stakeholders, it says
“The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served.”
With all the focus on ESG, this is now becoming a vital section of the Code.
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 12.3 says,
"The company’s investor relations policy sets out the mechanism through which shareholders may contact the company with questions and through which the company may respond to such questions."
This is clear-cut, if companies allow for customers to easily contact them, how much more so should they allow shareholders to do so!
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 12.2 elaborates,
“The company has in place an investor relations policy which allows for an ongoing exchange of views so as to actively engage and promote regular, effective and fair communication with shareholders.”
We breakdown the words regular, effective and fair - what do they mean?Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 12.1 says,
“The company provides avenues for communication between the Board and all shareholders, and discloses in its annual report the steps taken to solicit and understand the views of shareholders”
What avenues are there for he Board to further engage with shareholders? How does UOB engage, even with the smaller retail investors?
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Principle 12 is an interesting one,
“The company communicates regularly with its shareholders and facilitates the participation of shareholders during general meetings and other dialogues to allow shareholders to communicate their views on various matters affecting the company.”
Aren't interactions at shareholders meeting sufficient? What "other dialogues" is this referring to?
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 11.5 is also a legal requirement, it says
“The company publishes minutes of general meetings of shareholders on its corporate website as soon as practicable. The minutes record substantial and relevant comments or queries from shareholders relating to the agenda of the general meeting, and responses from the Board and Management.”
What were the bad practices in the past, regarding minutes, that this is meant to minimize?
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 11.6 says
“The company has a dividend policy and communicates it to shareholders”
Companies obviously worry that setting a policy is just setting unreasonable unexpectations, after all, who can predict the future? While that is true, the benefits outweight the costs of such a disclosure.
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 11.4 says
“The company’s Constitution (or other constitutive documents) allow for absentia voting at general meetings of shareholders."
So even when absent, shareholders can vote. How is this done in Singapore?
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 11.3 says
“All directors attend general meetings of shareholders, and the external auditors are also present to address shareholders’ queries about the conduct of audit and the preparation and content of the auditors’ report. Directors’ attendance at such meetings held during the financial year is disclosed in the company’s annual report.”
What signal is given, if some directors are missing during the General Meetings? Either that they do not care about shareholders or that they worry about the questionings during such meetings.
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 11.2 says
“The company tables separate resolutions at general meetings of shareholders on each substantially separate issue unless the issues are interdependent and linked so as to form one significant proposal. Where the resolutions are “bundled”, the company explains the reasons and material implications in the notice of meeting.”Why is there a prevention of bundling? Isnt that more efficient?
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 11.1 says
“The company provides shareholders with the opportunity to participate effectively in and vote at general meetings of shareholders and informs them of the rules governing general meetings of shareholders.”
The right to vote is sacrosanct for a shareholder, even if his vote will not change the outcome (as there might be a majority shareholder), he will be able to vote and have his vote recorded.
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Principle 11 looks at shareholders and says
“The company treats all shareholders fairly and equitably in order to enable them to exercise shareholders' rights and have the opportunity to communicate their views on matters affecting the company. The company gives shareholders a balanced and understandable assessment of its performance, position and prospects”
This might not be the easiest of things when we invest in a family-owned listed company!
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 10.5 does not get too much attention but is important
“The AC meets with the external auditors, and with the internal auditors, in each case without the presence of Management, at least annually.”
Does this provision meet all the auditors, internal and external, meet together? Or do they mean a separate meeting?
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance -
Provision 10.4 states
“The primary reporting line of the internal audit function is to the AC, which also decides on the appointment, termination and remuneration of the head of the internal audit function. The internal audit function has unfettered access to all the company's documents, records, properties and personnel, including the AC, and has appropriate standing within the company.”
The Internal Audit is truly the right-hand man of the AC. Thus, we notice how much empowerment is devolved to it.
Show Notes
1) Download the Singapore Code of Corporate Governance below
https://www.mas.gov.sg/-/media/mas/news-and-publications/code-of-corporate-governance-6-aug-2018-revised-11-jan-2023.pdf
2) Join the preparatory course for the SCA exams
https://courses.learningluminaries.com/courses/sca-business-valuation-governance - Vis mere
