One in six new directors on boards of SGX-listed companies is accredited by SID
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Data from SGX showed that among all 618 directors on publicly-listed boards, 105 of them are accredited by the organisation.
PHOTO: ST FILE
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SINGAPORE - Against a rapidly changing and increasingly complex business backdrop, Singapore-listed companies are choosing to appoint at least one director out of every six on their boards with the requisite credentials from the Singapore Institute of Directors (SID).
Data from the Singapore Exchange (SGX) showed that among all 618 newly appointed directors on publicly listed boards in the past 12 months, 105 of them have been accredited by the organisation, which has nearly 1,500 such directors on its registry.
These directors have to commit to continuous professional development to maintain their credentials.
The SID accreditation programme was formally launched in May.
Faced with challenges such as global supply chain disruption, intense geopolitical tension and uncertain economic conditions, there are growing expectations over the evolving role of directors, said SID chairman Yeoh Oon Jin on Oct 1.
He said that the accreditation process not only establishes standards for director competencies but also encourages directors to stay relevant through continuous professional development.
“We ask that board chairs and chairs of nominating committees consider accredited directors when making board succession plans,” he added.
He was speaking at the SID Directors Conference on Directorship In Transition: Redefining Roles, Risks And Results.
Among other initiatives, the SID has a foundational programme for aspiring directors, another for the newly appointed, and a separate one for directors of charities.
The institute is launching fresh courses to support directors in navigating emerging challenges.
Such courses include a digital module together with Singapore Management University and Singapore Computer Society; an advanced programme on sustainability with KPMG and SGX RegCo for those who want a deep dive into sustainability governance; and a chair accelerator programme for both newly appointed and potential board chairs.
Commenting on what companies need to do when confronted with the competing goals of building resilience and innovating, SGX chair Koh Boon Hwee said that directors and senior management had to do both almost simultaneously.
Speaking during a fireside chat at the conference, he said that companies must not only tend to today’s problems, they must also have an overarching vision of where they want to be 10 years down the road and take the risks that are necessary to get the business there.
“If you run a business by avoiding all risks, I think your chances of extinction are much higher than if you take some risks now,” he said.
Mr Koh said this applied to the problem of over-governance as well. Because of the increasing amount and complexity of rules, there is a danger that management may worry about the risk they face and inadvertently create a compliance culture of ticking the boxes, he explained.
“Board meetings will be more about audits, recovery and contingency plans and compliance methods, rather than about the strategy of the company and how it could be more successful going forward. If you default into that mode, the future of the company is at risk.”
On the issue of business failure amid the changing business environment, Mr Koh said: “That is just a natural state of affairs. In spite of the best efforts of management and the board of directors, some companies will fail.
“This is just Darwinism at work.
“In the long run, it’s healthier for an economy when companies die and new ones are developed, rather than having an economy with a lot of zombie companies that don’t actually bring any vibrancy.”
On succession planning, Senior Minister Teo Chee Hean said at a separate fireside chat at the conference: “It’s not about sending out search parties all over the world to look for the elixir of eternal life.
“The secret to continuity and stability is actually good succession.
“Also, make sure that you get the structure right within the time that you are in charge of it so that when you hand it over to your successors, they have a good set of cards to play with.”
Correction note: In an earlier version of the story, we said that among all 618 directors on publicly listed boards, 105 of them are accredited. The SID has since clarified that the 618 referred to newly appointed directors over the past year.
