Mr Yeoh Oon Jin, Chairman, Singapore Institute of Directors
Ladies and Gentlemen
Opening
1. Good morning. I am very happy to join you at this year’s Directors Conference.
2. Today, we are at a pivotal moment for Singapore companies and our capital markets – a time of both opportunity and challenge. Our equities market has shown resilience in recent months, and there are encouraging signs of renewed interest from both retail and institutional investors, signalling a healthy appetite for Singapore equities.
3. This momentum opens more avenues for local companies to access capital to foster further growth and innovation, while also benefitting our economy through the creation of quality jobs in financial services and related sectors.
• On the jobs front, our financial sector has been creating many good jobs for locals, with over 2,500 licensed financial institutions employing close to 200,000 people, of which over 80% are locals. The sector also offers the highest median gross income amongst full-time employed locals. Over the past decade, the financial sector workforce grew by more than 40,000, with 9 out of 10 of the net jobs created going to locals.
• In addition, based on latest available data, the Financial & Insurance Services sector continues to offer about 6,500 job opportunities in diverse range of roles such as Financial Planners and Wealth Managers.
• I want to make it clear that even though we are very happy that the financial industry has helped to create many jobs for locals, it is an industry that we must continually keep open and welcoming to talent from around the world, because that is necessary for us to have complementary international talent, to work alongside our local workforce, to grow our industry further, and hopefully, in the process, create even more jobs for our own.
4. That said, the external environment remains uncertain. Supply chain disruptions, inflationary pressures, and shifting geopolitical dynamics continue to pose headwinds for businesses worldwide. To thrive, our companies must remain agile, take calculated risks and also, embrace transformation, to raise productivity and improve competitiveness.
5. We took the same approach when we embarked on a review of our equities market in August last year. Working together with our industry stakeholders, we took calculated risks, and implemented some concrete steps towards our shared goals. One year on, we have announced and rolled out some measures, with some more to come.
• On the demand side, we launched the $5b Equity Market Development Programme, where we are investing through fund managers in mandates with a strong focus on Singapore equities, especially focusing on the smaller and mid-cap sorts
o The aim of the EQDP, is to strengthen the local fund management ecosystem, increase investor interest and also deepen trading liquidity in Singapore’s equities market.
o We announced the appointment of the first batch of asset managers in July, and will appoint the next batch by the fourth quarter this year.
• On the supply side, we are implementing measures to attract quality listings and we will continue building on efforts to support companies at various stages of their growth journey, to build a healthy pipeline of potential companies for listing.
• We are also enhancing our regulatory framework to balance investor protection with market efficiency, streamlining processes while maintaining the high standards that define Singapore's reputation for corporate governance and transparency.
6. While these measures seek to get the fly-wheel going, so as to build up the momentum, and create the conditions for a more vibrant and efficient market, they alone are not enough to improve valuations and liquidity. An ecosystem-wide approach is required, including actions taken by our companies.
• This is where all of you, as company directors and leaders, play a critical role.
• This is why the theme of today's conference – Transformational directorship – is very apt.
• Directors must be catalysts for value creation, transforming your companies and unlocking the shareholder value that lies within Singapore's corporate sector.
The Imperative for Company-Led Transformation
7. When we were doing the review for the equities market, we consulted widely, and heard from different industry stakeholders. Our consultations point to a clear gap – Singapore companies can and must do more to deliver greater shareholder value.
• Too often, companies make the wrong assumption that if they have strong revenue growth and healthy earnings, these will automatically translate into better share prices.
• But today’s investors are far more sophisticated. Strong revenue growth and healthy earnings are certainly necessary, but they are often insufficient in today's investment landscape.
8. When I spoke on the equities market review last year, I gave an analogy at one of the sessions, that we must be prepared to take some risk, whether in the review, or when we make investment decisions. Because investment is not the same as buying durians, there is no such thing as “bao jiak” or guaranteed returns, when it comes to investments. It is important for investors to do your research and consider the risks carefully.
9. This morning, please allow me to also use another durian analogy. Just as durian lovers today are highly discerning, and they are able to tell the difference between a D24, a Mao Shan Wang or a Black Gold – investors too are looking beyond headline earnings.
10. They want to understand your growth story, not just your current performance. Of course, your current performance is important, but they also want to know what your future plans are, and what is that growth projection. They want visibility on capital allocation, clarity on long-term strategy, and confidence that management is committed to creating value.
11. To capture their attention, companies need to go beyond standard financial reporting. They must also present a compelling narrative of how the actions today will translate into tomorrow’s success.
12. When companies combine strategic value creation with effective communication, they create the conditions for investor confidence. This in turn translates into investment dollars, which can help to deliver better share price performance and to create greater shareholder value.
13. The Review Group is developing a set of measures to support our companies in unlocking shareholder value. More details of this package will be announced later this year, but today, please allow me to share with you the three key elements we believe can help companies to unlock value.
A. Capabilities - Building Strategic Excellence
14. The first is to help our companies build up stronger capabilities to achieve their strategic and communication objectives.
15. C-suite executives and board directors need proficiency beyond financial management. They must be skilled in corporate strategy, capital optimisation, investor engagement, and media outreach.
16. Corporate leaders need to focus on strategic priorities beyond day-to-day business operations – they must actively develop long-term plans and think about value creation with the shareholders in mind.
• This often requires a mindset shift, including for founder CEOs who have been growing the business from day one, because, as you all know, it is very different leading a public listed company versus running a private company.
• For listed companies, the IPO is not the destination, but a gateway to raising further capital. It is also a gateway to help support further business growth, and long-term shareholder returns.
• Shareholder value must therefore be a priority in order for this journey to continue and to be sustainable. Company management and boards must look for ways to deliver shareholder value – and this includes through business expansion, capital optimisation, and operational transformation, just to name a few examples.
17. Beyond this, companies must also communicate their plans with investors effectively. CEOs cannot limit themselves to giving updates just once a year at the AGM – they must consistently articulate the company’s vision and engage investors and other stakeholders via mainstream and social media.
• CEOs are the face of the company – just like Bill Gates is the face of Microsoft or Jensen Huang is for NVIDIA, or Piyush Gupta when he was leading DBS and now his successor Ms Tan Su Shan. These leaders do not just run their companies; they embody their brands and personally champion their growth stories to the world.
• But this cannot rest on the shoulders of our CEOs alone. The entire leadership team must be equipped. For example, our CFOs also play a very critical role, and they need to go beyond producing accurate financial statements to see how these numbers can help to tell the company’s narrative.
• Investor relations teams must proactively engage investors and anticipate concerns.
• And directors must also help to ensure the organisation will invest in developing these critical skills.
18. All these will require skills development and capability building efforts.
• SID has been a strong advocate over the years for continuous learning, and director development, and there are various programmes that companies can consider for your leadership teams.
• To further support companies in building competencies, MAS is looking to support companies' investments for training to develop these essential skills, and we want to work closely with partners like SID. More details will be shared in due course.
B. Communications - Amplifying Market Presence
19. The second key to unlock value is communications. In Singapore, we often believe that actions speak louder than words.
20. This is good, because we make sure we have substance, we make sure that whatever we say is fact, we have concrete action. But I think in today’s world, where people have more choices, doing so alone is not enough. We must be able to show and share – not to boast or to exaggerate, but to help others understand and buy into the vision of what we’re building. This is an important part of building trust, and earning the confidence of our stakeholders and partners. I want to be clear I am not advocating an approach where we just have more “hot air”, that is not a good approach because if you keep doing that, you will affect confidence and trust. But beyond having good substance, I think it is also helping others to understand what we can deliver and what value will be created.
• So listed companies will need to put themselves forward – finetuning and communicating of strategic plans, holding regular investor engagements, and making your growth story more accessible, to investors, to analysts, to other stakeholders.
• I would also encourage companies to consider sharing your views on the company’s outlook and prospects, as is commonly done in many other overseas markets.
• This will help to give investors greater visibility into your company's trajectory and demonstrates management's confidence in delivering on strategic objectives.
• We recognise that there may be genuine concerns about potential legal exposure when companies provide such information. MAS will review how to provide greater clarity on our regulatory framework, to facilitate open communication while upholding market integrity. We hope this will give companies, directors, and management teams, greater comfort and assurance to have meaningful forward-looking engagements with your investors.
21. To support our companies, MAS partnered with Stewardship Asia Centre (SAC) to conduct a study of investor-investee engagement in the Singapore market. This study explores the vital link between engagement quality and company valuations and identifies the information that investors value most.
• Preliminary findings show that 9 out of 10 institutional investors agree that quality of engagement and in particular, clear communication of long-term strategy, has moderate to significant effect on company valuations.
• Based on insights derived from this study, practical guidance and templates will be developed, which companies can use to create robust engagement plans tailored to your specific circumstances and investor base.
22. SGX is also reviewing how companies can do more to disclose policies such as dividend and investor relations, as these would help investors understand the company’s capital management approach, engagement practices, and how management will deliver shareholder value.
23. We also know that smaller firms with less resources, may struggle for visibility. So, even if you come up with good plans and put yourself out there, you may not catch the attention of investors, research houses, or the media.
• We hear you and we will do our best to support you on this front.
• We are working with SGX to provide more platforms that can help our smaller companies to amplify your efforts and increase your market presence.
• SGX will hold investor roadshows or trade fairs which companies can participate in, to gain exposure to institutional and retail investors. SGX also plans to arrange for media features and engagements designed to help profile listed companies that have a good story to share with the investing community.
• These are additional programmes on top of MAS’ GEMS programme, which we have recently enhanced, to encourage research reports on firms that are currently not covered or on newly listed companies. So this is what we want to do together, it is not just Government alone, or industry alone, but we will do it together. Industry will do some of it, and we will support you through our means and resources.
C. Communities - Fostering Collaborative Networks
24. And that brings me to my last point, building communities. Transformation is most powerful when supported by networks that help foster peer learning and knowledge exchange.
• Take for example Homebrew Computer Club in Silicon Valley back in the 1970s. It started as a small gathering of hobbyists tinkering with personal computers. But it was in that community of sharing and experimentation that pioneers like Steve Jobs found inspiration to launch innovative ideas that went on to transform the world.
• We want to see how we can similarly encourage and nurture the same conditions here in Singapore – environments where our business leaders can engage in meaningful dialogue, share experiences, and collectively drive the transformation of our corporate and capital market landscape. And if I may say so, this is not just for Singapore directors, but we also want to welcome directors from the region, from other countries, to join us, because many of these ideas actually are not limited by national boundaries. If we can develop, some of these ideas can actually allow us to collaborate across geography.
25. In November, SID will launch a new Chairpersons Guild, which will bring together the board chairs of listed companies to build a micro community for learning and mutual support.
• SID is working with organisations like UBS and McKinsey to offer expert insights on strategies and ways to help unlock shareholder value.
• SID is also working to bring in experienced board chairs from global markets to share their transformation experiences and successful value creation journeys, providing our directors with international perspectives and proven approaches to shareholder value enhancement. In addition to international directors and business leaders, we also have good examples of local business leaders and directors who we can invite to share, and I hope, if you are invited, please support this.
26. Beyond the boardroom, it is equally important to foster networks at different organisational levels – among management teams implementing strategic transformation, among investor relations professionals preparing and sharing company narratives to the market and also between listed companies and investors.
• We are working with various partners to develop and roll out additional partnerships across different levels over the coming months.
• These collaborations will create structured opportunities for engagement, knowledge transfer, and relationship building across our capital markets community.
27. One other crucial aspect of building strong communities is to spotlight companies that have done well. Recognition mechanisms – through awards, scorecards, and indices – both reward excellence and inspire others.
• Indices are useful tools in this regard, as they create visibility, and can also help to track performance of different industry or market segments.
• SGX will be launching a new index that tracks companies beyond the Straits Times Index (STI), as part of its efforts to showcase Singapore’s broader equity market.
• The STI represents only a portion of our listed companies, and investor interest in the next tier is growing – partly driven by some of the efforts I outlined earlier. This new index will provide a useful lens to track how the next tier of large and medium companies are evolving – whether through business model transformation, improved governance or stronger capital management initiatives.
• Over time, we hope to see more indices emerge, covering areas such as corporate governance and sustainability – creating a virtuous circle and generating positive momentum for the entire market.
In Closing
28. The transformation we seek will not happen by chance – it requires support and action from all of you. MAS and other government agencies have worked with SGX to improve our equities market platform. We have calibrated our regulatory framework to shift towards a more disclosure-based regime, with the aim of being both pro-enterprise and pro-investor confidence. And we will continue to work hard to attract investor interest and to deepen market liquidity.
29. But the real engine of transformation lies within our companies – through your leadership, your vision, and your ability to achieve that vision.
30. The opportunities before us are substantial. Singapore's strategic position, our position as a trusted hub, our trusted regime and regulatory framework, and importantly, the quality of our corporate leadership, these provide the foundations for unlocking significant shareholder value.
31. We will be sharing further details of the grants and initiatives under our proposed “Value Unlock” package. I look forward to your continued support and your leadership, to help all of us achieve this objective, to unlock greater shareholder value and position our companies for sustained growth in an increasingly competitive global landscape.
32. Thank you.
