The shock resignation of Singapore Post (SingPost) group chief executive Wolfgang Baier last week underscores the problems the firm has with corporate governance, according to National University of Singapore (NUS) Business School associate professor Mak Yuen Teen.
Prof Mak said the firm has seen CEOs come and go while being a laggard when it comes to board renewal. Dr Baier stunned market watchers last week when he resigned after four years at the post and after what many analysts praise as a radical transformation of the firm that has turned it into a global logistics force.
A check shows that Dr Baier's predecessor Wilson Tan was the third SingPost group CEO to resign in a five-year span when he stepped down in April 2010.
While Prof Mak noted that SingPost was named last month as one of the top 50 Asean publicly listed companies in terms of corporate governance, "there were certain practices that troubled (him)".
If you look at the executive committee, it's made up of the long-serving or older independent directors rather than ... individuals who have skills and experience relevant to SingPost's new direction.
ASSOCIATE PROFESSOR MAK YUEN TEEN, of National University of Singapore Business School
He pointed to the long tenure of some of SingPost's independent directors and questioned the relevance of the skills and experience of some of them in the light of the firm's transition into an e-commerce logistics player.
His other concerns include a possible lack of clarity between the roles of the board or executive committee and management and the experience of the transition team they have in place to oversee the integration process after several acquisitions, including that of e-commerce provider TradeGlobal Holdings.
In October, SingPost acquired a 96.3 per cent stake in TradeGlobal - less than a week after it unveiled plans to buy e-commerce logistics enabler Jagged Peak.
"If you look at the executive committee, it's made up of the long-serving or older independent directors rather than... individuals who have skills and experience relevant to SingPost's new direction," he told The Straits Times yesterday.
"From a governance standpoint, executive committees can lead to a situation where the board ends up effectively managing the company, leaving the CEO as more of a chief operating officer."
Prof Mak noted in his commentary published in the media yesterday that deputy chairman Goh Yeow Tin, 64, will be appointed executive director from Jan 1 for 12 months to oversee the group's post-merger integration work. "One must question whether Mr Goh has the necessary knowledge about the business, experience and time, to undertake what sounds like a rather onerous task - especially working alongside an acting group CEO who is also new, and who appears to be still holding the group CFO's (chief financial officer) reins," he added.
"If the board feels that his skills are less suited for post-merger integration, I can't see the transition team doing any better. Further, there have been other recent changes in the CFO and group company secretary positions, which also lack adequate explanation." The firm announced in July that CFO Daniel Phua was leaving to pursue other career aspirations. Mr Phua took up the position in August 2014.
A SingPost spokesman said the company will be responding to Prof Mak's commentary.