Singapore boards are unprepared for future complexities: Piyush Gupta
Their role transcends beyond being a ‘policeman’, he says; they also need to be a ‘navigator’ and ‘shepherd’
[SINGAPORE] Many corporate boards are largely unprepared for future complexities, said former DBS chief executive Piyush Gupta at a conference organised by the Singapore Institute of Directors (SID) on Friday (Sep 12).
Speaking at a panel, Gupta said that he does not think boards are ready because the expectations of boards is to be a “policeman”, particularly after the global financial crisis.
Fellow panellist Andrew White, Blackmore Family Foundation chair of business leadership at Griffith University, said that boards are not prepared because we have moved from an “age of incrementalism” to an “age of disruption”.
White perceives the “age of disruption” to be a “radical re-invention of operating models and businesses”, noting that growth rates of 10 to 15 per cent in the past are part of the “age of incrementalism”.
Sharing his past conversations with chief financial officers, White said that these CFOs noted that there might be a potential headcount reduction of 80 to 95 per cent in the finance function, although there is no timeline for that.
Chew Gek Khim, executive chairman of The Straits Trading Company, agreed with both Gupta and White that boards are not ready to handle incoming complexities.
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However, she noted that multinational companies and larger firms tend to put people who are focused on governance on the board. Smaller companies, meanwhile, are more focused on “fighting fires”, meaning they are always dealing with change.
“So this idea of being prepared depends on the type of people on the board and the type of mindset,” Chew added.
Gupta noted that in reality, the role of the board goes beyond that of being a “policeman”, as it also needs to be a “navigator” and “shepherd”.
“A lot of people make the mistake of thinking about performance in the short term, then you get into a conflict,” he said.
However, if people started to think about the performance in the long term, then the conflict tends to be squared away, he added. Other panellists on the board included Desmond Chin, commissioner of charities at the Ministry of Culture, Community and Youth.
