Teen focused on the essential elements of CG viz. robust regulatory framework and enforcement, strong shareholder rights, regard for interests of other stakeholders, ethical culture, effective board of directors, effective risk governance & management, high standards of disclosure and transparency.
Being skeptical of the effectiveness of self regulation and the dual role of exchanges as regulator as is the case in Singapore (SGX) he
expressed the need of a separate and effective regulator like SEBI in India.
On enforcement front it is very difficult and expensive for minority shareholders to get their concerns, grievances and issues resolved & redressed in most of the Asian countries.
There are 20-30 scandals reported in the companies listed on SGX mostly foreign companies and it is very difficult to enforce rules on such kind of companies.
Out of the 800 companies listed on SGX 40% are foreign and around 50% of the foreign companies are from China.
Rules are evolving and SGX has made it is easier to sue people for insider trading etc. Australia on the other hand has strong corporate securities laws that really go after the directors of the companies.
On the roles of independent directors Mak
feels and is lobbying for the restriction on number of boards an individual can sit on.
Most of such independent directors are either not aware of their duties or not adequately equipped to discharge their duties as directors.
And as the AGMs bunch up during last few weeks of the deadline say the month of April in Singapore they just rush from one meeting to another one.
And during the time of crisis or scandal they are ones to quit!
dwelled in details on the size, independence, competencies, diversity, commitments etc for the effective boards.
and Lee also responded to queries from the audience like how differential voting rights affected corporate governance, why they were generally apprehensive of companies with differential voting stocks, corporate governance issues at Facebook in face of acquisition of Instagram, David Sokol case raising question on corporate governance structure at Berkshire, how compensation system was implicitly encouraging REIT managers to conduct above market value real estate transactions to drive up net asset value thus indirectly affecting REIT unit holders and so on.
Teen is founding director of the Corporate Governance and Financial Reporting Centre
(CGFRC) and Associate Professor of Accounting at the NUS Business School
, National University of Singapore
He holds a First Class Honors and Master degree in accounting and finance and a PhD in accounting, and is also a fellow of CPA Australia.