Only 25 days after RAdm Lui's promotion, Dr Lee Boon Yang was the newly appointed non-executive Chairman of Keppel Corp, Singapore's largest industrial conglomerate. It was an event of little fanfare, and by the lack of any noise made by Keppel shareholders, you would have thought that everybody is happy about the change in leadership at the helm of Keppel's board of directors.
However, a careful examination of Dr Lee Boon Yang's CV, and the demands of the role of Chairman of the Board of an industrial conglomerate like Keppel - leaves the interested observer rather puzzled.
According to Keppel's website, the principal functions of the board are to:
"decide on matters in relation to the Group’s activities which are of a significant nature, including decisions on strategic directions and guidelines and the approval of periodic plans and major investments and divestments;
oversee the business and affairs of the Company, establish, with management, the strategies and financial objectives to be implemented by management, and monitor the performance of management; oversee processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance, and satisfy itself as to the adequacy of such processes; and assume responsibility for corporate governance.
All directors are expected to exercise independent judgment in the best interests of the Company. This is one of the performance criteria for the peer and self assessment on the effectiveness of the individual directors."
Here is the description of the role of Chairman of the Board, verbatim, from Keppel's website:
"The Chairman, with the assistance of the Company Secretary, schedules meetings and prepares meeting agenda to enable the board to perform its duties responsibly having regard to the flow of the Company’s operations.
The Chairman sets guidelines on and monitors the flow of information from management to the board to ensure that all material information are provided timeously to the board for the board to make good decisions. ...
He also ensures that relevant information on business initiatives, industry developments and analyst and press commentaries on matters in relation to the Company or the industries in which it operates are continuously circulated to board members so as to enable them to be updated and thereby enhance the effectiveness of the non-executive directors and the board as a whole.
The Chairman also ensures effective communication with shareholders.
The Chairman takes a leading role in the Company’s drive to achieve and maintain a high standard of corporate governance with the full support of the directors, Company Secretary and management."
It hence seems that the Chairman should have significant experience in
- business & corporate strategy in order to provide approval (or disapproval) to periodic plans and major investments and divestments;
- management, strategy and finance in order to evaluate the objectives to be implemented by management,
- performance monitoring and internal controls, risk management, financial reporting and compliance,
- corporate governance (i.e. protecting the interests of shareholders)
Well, with all due respect, I don't really see how Dr Lee's experience is directly applicable to the meeting the above requirements. Don't get me wrong here, I'm not trying to bash the guy. I actually think he's got a nice personality and was one of the most affable ministers in cabinet. But being the Chairman of a major business is a totally different ball game here.
Dr Lee Boon Yang's CV (from Parliament Website)
- B.V.Sc University of Queensland, Australia
- 01.02.1985-06.05.1985 Parliamentary Secretary, Ministry of the Environment and Ministry of Communications and Information
- 07.05.1985-17.02.1986 Parliamentary Secretary, Ministry of Finance and Ministry of Home Affairs
- 18.02.1986-31.12.1986 Minister of State, Ministry of Home Affairs and Ministry of Trade & Industry
- 01.01.1987-12.09.1988 Minister of State, Ministry of Home Affairs and Ministry of National Development
- 13.09.1988-27.11.1990 Senior Minister of State, Ministry of Home Affairs and Ministry of National Development
- 28.11.1990-30.06.1991 Senior Minister of State, Ministry of Defence
- 01.07.1991-01.01.1992 Minister, Prime Minister's Office and Second Minister for Defence
- 02.01.1992-01.07.1994 Minister for Labour and Second Minister for Defence
- 02.07.1994-31.07.1995 Minister for Labour and Minister for Defence
- 01.08.1995-22.11.2001 Minister for Labour
- 23.11.2001-11.05.2003 Minister for Manpower
- 12.05.2003-31.03.2009 Minister for Information, Communications and the Arts
For the last 15 years, Dr Lee's experience has entirely been in the public sector. He has no experience in the corporate sector, no experience being accountable to shareholders (as a corporate executive or otherwise), and no business/commercial experience.
Sure you could make the argument that the government needs performance monitoring, internal controls, risk management and financial reporting. But the context within which these are performed is very different from a commercial entity where the focus and objectives are entirely different from a government entity. I guess Dr Lee Boon Yang would have little difficulty 'disseminating information to other board members and shareholders' - but anybody with any organisation experience at all should be able to do this without much difficulty.
So, why is Dr Lee the new Chairman of Keppel? Isn't it puzzling at all to the company's shareholders that he has been given the job? Well, I think that the probably the best answer to this question is Dr Lee's political connections.
If you look at Keppel's business ventures, you will see heavy involvement by Singapore's ministers in the corporation's business development. The Tianjin Eco-City, for example, has involved all of Singapore's political heavyweights - including Wong Kan Seng, Mah Bow Tan, and PM Lee Hsieng Loong himself. At the same time, the Singapore consortium involved in the development of the Eco-City is led by Keppel Corp. SM Goh Chok Tong was also involved in Keppel's win of a major environmental engineering project in Doha, Qatar, as well as was instrumental in getting the Qatar Investment Authority involved in signing up with the Singapore consortium in the Tianjin Eco-City.
It thus appears that the main value that Dr Lee brings to Keppel is his political connections. But given that SM Goh has already been heavily involved in Keppel's operations, and that Lim Chee Onn (the Keppel Chairman who is stepping down) himself was formerly a civil servant and MP, even that argument seems to be a little tenuous since Keppel is already heavily politically connected.
I don't have the answers - perhaps Keppel shareholders will have the guts to ask why Dr Lee has been appointed and seek the answer.
In any case, all this points to how Singapore's business and politics are all closely intertwined and interlinked. The fact that Lee Boon Yang is taking over the Chairmanship of Keppel with little fanfare, shows how matter-of-fact and common place such events take place in the country.
For Keppel and the Singapore Govt, it's business & politics as usual.