Good morning
1. Back in the 1980s, Singapore began embracing the concept of a Neighbourhood Watch. For those who are unfamiliar with this, the Neighbourhood Watch programme was something we imported from the US. It involves a group of people living in the same area, a community. And the community would form a Neighbourhood Watch group with the intention of making their neighbourhoods safer.
2. The objectives were to prevent crime and over the longer term, improve the quality of life. I’m also guessing that Singaporeans being Singaporeans, some of the participants may have been hoping to increase the value of their properties.
3. I am bringing this up today because I believe we can all benefit from thinking in terms of being part of the equivalent of a market Neighbourhood Watch.
4. The advantages of this concept are that:
a. To start with, it gets us thinking of the market as a community first, and not just an ecosystem. Unlike an ecosystem, a community has a shared purpose and common goal. Members of the community rely on each other and are able to trust one another because they all have a stake in the community. And because Singapore is small, the impact of just one thing, one wrong-doing, one incident, can affect everyone. Just as a single event can affect an entire community.
b. Second, a Neighbourhood Watch doesn’t rely on regulation to achieve its objectives. The fact that these groups exist is a recognition that it not possible to solve everything by regulation and enforcement alone. Some bad behaviour is best addressed by peer pressure, scrutiny, and advocacy.
c. Third, the Neighbourhood Watch volunteers are the ones closest to the ground. They are most familiar with the terrain and best able to tell when something is wrong. For example, they can immediately spot a loitering stranger, an unusual noise, or a broken window.
5. How then does a Neighbourhood Watch within the corporate or market community function? First and foremost, we need to agree on our shared purpose and common goal, which is preserving the integrity of the market. It is in our collective interest that standards are kept high and everyone is doing what he or she is supposed to be doing. Within such a community, we can build a regulatory presence that goes beyond rules and regulators.
6. Take conflicts of interest for example. It is impossible to legislate chapter and verse against every single permutation of conflicts of interest. But a sponsor can step in to ensure that a company considers not just the form but also the spirit behind the rules governing conflicts of interest. The other professionals advising the company can do the same.
7. The result of this shift in thinking from ecosystem to community enables the whole mindset to change. Instead of focusing on the transaction in front of us and haggling over the technical rules, we can take a step back and think about the precedent we are about to set, the signal we are going to send to the rest of the market and the long-term impact on our shared goal of a safe and trusted community.
8. Of the 750 companies listed on SGX, only a small minority are non-compliant. But it only takes a small minority to impact the reputation of the entire market community. Our regulatory approach is to target the non-compliant companies and to avoid burdening compliant companies unnecessarily with over-inclusive rules that apply across the board. In order for us to do this, we need your help, to speak up, on behalf of everyone in the community, to put things in perspective and protect the community from misperceptions and mischaracterizations, and to offer a balanced view on policy issues relevant to corporates and the Singapore market as a whole.
9. But ultimately, they say that economy begins at home. That’s why we are going to be investing significant time, resources and energy to change the way we ourselves do things at SGX RegCo. In particular, I want to emphasise that we will be enhancing how we handle whistle-blowers and also the way that we conduct inspection of the market professionals we regulate, beginning with Catalist sponsors.
10. Before I end off, I want to congratulate the companies that have improved – whether absolutely or relatively – in the Singapore Governance and Transparency Index 2019. In a way, the SGTI is like a positive version of CrimeWatch. For those of you who are unfamiliar with CrimeWatch, it is a TV programme that creates greater public awareness by featuring noteworthy crimes.
11. In the same way that CrimeWatch is much more than just a prime time drama, your position in the SGTI is not the be-all and end-all. Those of you that are highly-ranked can create greater awareness on how to achieve better governance practices and standards. You can be leaders in the community, advocates for change, and mentors to those who aspire to the same heights.
12. On that note, thank you and congratulations to those who have improved and achieved creditable SGTI rankings.
