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Transcript: Remarks by Lim Boon Heng to Chairs of Major Temasek Portfolio Companies

Thank you all for agreeing to stay back for this smaller group discussion following lunch.          

I wanted to let you know that the second Temasek Roundtable in the next few months will focus on questions of governance and ethics. I want to have this small group meeting specifically to ask for your companies’ active support and participation in this roundtable event. 

During my [Temasek Chinese New Year] lunch remarks just now, I emphasised how important it is for our companies to guard and uphold the principles of good governance and integrity in business dealings. This is especially so for our Singapore-based Temasek portfolio companies. 

Singapore has a reputation as a clean place for both business and government. We take this reputation very seriously. It is a hallmark of our nation and the fundamental value on which we have built our economy. 

It is no coincidence that we have been consistently rated one of the world’s least corrupt countries. The past conduct and business records of all your companies have contributed to this global recognition. We all have a continuing responsibility to uphold this reputation. 

In markets where practices are questionable and compromising integrity is required to win business or contracts, we have to be very clear – there is a bright red line our companies should not cross. 

We have had Roundtables before to share on aspects of doing business outside Singapore. These included topics on the UK Bribery Act, and the US Foreign Corrupt Practices Act. 

What happened recently was a shock, not just to the company concerned, but it really dents the reputation of Singapore and all the other Temasek companies. 

Hence, I want to have another Roundtable to bring everybody together, align ourselves and set expectations on how we should operate and conduct business, ethically and with proper guidance. 

We are all stewards, responsible not just for short term profits, but really the long term future of our companies. Hence, I would like your support to bring together all your board members, along with your CEOs and key executives of your companies for our next Roundtable. 

I want to spend some time this afternoon with this group, to share some thoughts and also to gather your views and support. 

Recent news has been centred on bribes being paid, but corruption offences are not limited to bribes. 

Corruption takes on many guises. In many jurisdictions, the penalties for price fixing and collusion are no different to bribery, and the offence no less serious. 

It takes courage to walk away from business opportunities, but it is more important to maintain and protect the reputation of your company and our nation. 

You all know that corporations can be held legally accountable for the actions of their staff and their third party agents. The expectations on directors are also very high. We should and must ensure that our companies have proper safeguards and policies in place. 

The consequence of wrongdoing is a very heavy one for the company to have to pay. It can be even heavier for individuals. 

The stain on the reputation of the company, on its shareholders, and on Singapore is even more damaging. 

We must also expect all our shareholders and stakeholders to be concerned, and to demand action. As you are aware, questions were raised in Parliament. In Parliament, Senior Minister of State, Indranee Rajah, said the following: 

Temasek expects companies in its portfolio to abide by sound corporate governance and robust codes of conduct and ethics. Temasek holds the respective boards and managements responsible and accountable for the day-to-day decisions and actions of these portfolio companies, but Temasek does not direct the day-to-day business decisions or operations of the Temasek portfolio companies. 

But what Temasek can and does do is to conduct regular roundtables, forums, educational programmes, all essentially directed at encouraging not just its portfolio companies but all other companies to keep and maintain clean systems and avoid corrupt practices. 

The boards … depending on whether the members are executive or non-executive, it is their business to make sure that the policies and so on for the company are proper, that governance is proper, and then the day-to-day operations are done by the … management. 

Her comments accurately sum up our position and our expectations. In cases of wrongdoing, we all must be ready to engage shareholders and stakeholders, with what we have done to remedy the wrongdoing, and ensure it doesn’t recur. 

All of us, as Chairs and board directors of companies, are stewards of our companies. We, and our fellow directors, hold them in trust on behalf of all shareholders – not just Temasek, but minority shareholders just as importantly. 

We are also entrusted with the responsibility of being the owners and guardians of the company’s reputation, and we must always live up to that trust. 

Over coming months, the Temasek team will share with you and your team more details of the coming Temasek Roundtable. This is a serious matter, and I seek your full support and participation, not just for the Roundtable, but also in following through with your respective companies. 

We will bring in domain experts and we hope to draw on companies that have dealt with corruption and bribery, to share what they have done, and how they have implemented best practices. 

In addition, we will continue the series of forums in functional areas during the year. 

For instance, our Legal team regularly convenes gatherings of their counterparts among your companies to cover topical issues including governance, anti-bribery, foreign investment approvals and anti-trust developments. 

Our Public Affairs team will be organising a forum to bring together communications teams from across our portfolio to share expectations and best practices on managing reputational challenges. If there are areas which your team needs support, our team is willing to help. 

I would like to open the floor now to you, and in particular, ask if there are areas where we can help you strengthen your governance models? Also, are there topics which you would find useful to include in our coming roundtable? 

How do you see the regulatory challenges and climate ahead for your companies? And how comfortable do you feel that your companies have the right tools, structures and people to help navigate these reputational challenges? 

These are some of the questions on which I hope our teams can proactively engage with your boards and leadership teams in coming months. 

I know you all share our absolute commitment to these principles. Please reinforce your commitment with your fellow directors, and especially to your management teams. I count on your support as we build and deepen engagement on these questions with you and your teams in coming months. This is critical as your companies grow and globalise beyond Singapore.