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Corporate Governance

 

Governance Framework

Temasek is a commercial investment company governed by the provisions of the Singapore Company Act.

Our governance framework emphasises substance over form, long term over short term, and puts institution over self. It provides for accountability and a robust balance between empowerment and compliance.

Our Board and management ensure compliance with the rules and regulations wherever we have investments or operations.

Commercial discipline


We manage our portfolio as an active investor and asset owner, with full commercial discretion and flexibility under the guidance of our Board.

Relating to the President of Singapore and our shareholder

Under Singapore’s Constitution and laws, neither the President of the Republic of Singapore nor the Singapore Minister for Finance1, our shareholder, is involved in our investment, divestment or other business decisions, except in relation to the protection of Temasek’s own past reserves.

Relating to our portfolio companies

As an engaged shareholder, we promote sound corporate governance in our portfolio companies. This includes the formation of high calibre, experienced and diverse boards to guide and complement management leadership. We do not direct their business decisions or operations.

To read more on corporate governance, please see A Trusted Steward in the Temasek Review.

Footnotes:

1Under the Singapore Minister for Finance (Incorporation) Act (Chapter 183), the Minister for Finance is a body corporate.

 

Our Board’s responsibilities

Our Board provides overall guidance and policy directions to our management.

Our Board operates on a commercial basis, with the added constitutional responsibility, together with our CEO, of protecting the Company’s past reserves, given Temasek’s status as a Fifth Schedule entity under the Singapore Constitution.

The annual Board schedule includes quarterly two-day meetings, plus additional meetings as needed.

The Board has reserved the following matters for its decision:

  • overall long term strategic objectives
  • annual budget
  • annual audited statutory accounts
  • major investment and divestment proposals
  • major funding proposals
  • CEO appointment and succession planning
  • Board changes

Board Committees

Structure and delegated authorities of Board Committees

The following Board committees, each chaired by a non-executive Director who is independent of management, have been set up with specific delegated authorities:

  • Executive Committee
  • Audit Committee
  • Leadership Development & Compensation Committee

The Board has separate and independent access to information to assist it with its deliberations, including the opportunity to request supplementary or explanatory information from management. Management provides information to the Board on an ongoing basis to allow the Board to effectively discharge its responsibilities.

Executive Committee (ExCo)

The ExCo has been delegated the authority to approve new investment and divestment decisions up to a defined threshold, beyond which, transactions will be considered by the Board. The minutes of ExCo meetings are circulated to the Board. The ExCo met three times during the year.

Audit Committee (AC)

Comprising only independent directors, the AC supports the Board in its oversight responsibilities by reviewing – among other things – our system of internal controls, and processes used for financial reporting, audit, and monitoring compliance with laws and regulations. The AC also reviews the scope and results of the external audit, and the independence of the external auditors.

The AC is supported by Internal Audit (IA). To ensure its independence, IA reports functionally to the AC and administratively to the office of the CEO. IA has full and unrestricted access to all records, properties and personnel to effectively perform its functions. Aside from periodic planned reviews of key control processes for all offices, IA may also undertake special reviews requested by our Board, AC or senior management. The AC met four times during the year. 

Leadership Development & Compensation Committee (LDCC)

The LDCC is responsible for recommending Board and management leadership plans to the Temasek Board. These include Board and CEO succession, as well as guidelines and policies on performance measurement and compensation plans. The LDCC met four times during the year.