Ms Sharron Gunn,
Director for Member Services of the Institute of Chartered Accountants in England & Wales
Ladies and Gentlemen
1. I am delighted that, ICPAS and ICAEW will be signing a Memorandum of Understanding (MoU) that encourages improvement in the professional training for Non-Executive Directors (NEDs) in Singapore. This programme is very relevant for our members who serve or aspire to serve in the capacity of directors in both the private and the public sector.
2. Both Institutes also agree to work together to improve practices that lead to greater transparency, disclosure as well as increased corporate governance.
Enhancing Corporate Governance Standards
3. The financial crisis has highlighted the importance of risk management and oversight at the Board level and sparked increased global discussions on the need for better corporate governance practices.
4. The Monetary Association of Singapore (in short MAS) has been closely monitoring developments on this front and has proposed enhancements to the existing corporate governance framework for locally incorporated banks, financial holding companies and direct insurers.
5. Last March, a consultation paper on MAS’ proposed enhancements was issued. The proposals emphasise the important role played by the Board in overseeing the soundness of their financial institutions. The proposals also focus on the need for directors to be equipped with the appropriate skills and to be able to commit enough time to discharge their responsibilities more effectively. These key qualities of a director cannot be further emphasised.
6. Non Executive Directors (NEDs) are not affiliated with the organisation nor are involved in the day-to-day operations. Rather, they are custodians of the organisation’s goverence process. They
a. should constructively challenge and contribute to the development of strategy.
b. scrutinise the performance of management in meeting on agreed goals, objectives and monitoring, and where necessary – in the organization’s succession planning.
c. satisfy themselves that financial information is accurate and that controls and systems of risk management are robust and defensible.
d. Be responsible for determining appropriate levels of remuneration of executive directors
Current level of trainings for directors
7. The Singapore Exchange’s “Singapore Board of Directors Survey”, shows the proportion of companies providing relevant training to NEDs increased from 25% in 2005 to 41% in 2008. But the survey also noted an increase in the number of directors who received no relevant training.
I am happy to note, both Institutes see the need to equip our members with the appropriate skills and knowledge, to enable them to ask the right questions and make the right decisions. So that they can provide independent views on: Resources, Appointments & Standards of conduct.
8. Thus this NED training programme will serve to address this trend and has come in very timely.
9. Presently, there are more than 23,000 ICPAS members making their strides in businesses across all industries in Singapore and globally. This programme is specially tailored for this segment of our members who are NEDs.
10. The programme will have two tiers – one for aspiring non-executive directors and another for existing directors. Tier One covers the essentials of an NED: the role and responsibilities and board practices and procedures. Tier Two addresses the challenges and difficulties faced and provide a recent updates of changes.
11. Participants of the programme will learn good corporate governance practices by examining scenario-based case studies that are incorporated into the programme.
12. With increasing expectations on directors, companies will come to place a premium on well-trained, ethical directors who look out for the interests of all stakeholders, and contribute to corporate strategy development. ICPAS presents an opportunity for our members and public to upgrade and update their skillsets and knowledge as directors to be proficient and professional in their duties.
13. Grooming such NEDs will help to encourage new ideas, better practices and encourage leadership renewal for company boards.
16. We look forward to a long and fullfilling collaboration with ICAEW and our members.