- Strategic concerns about growth and innovation dominate the boardroom conversation in Singapore, where companies face technical disruption and global competition
- There is a talent shortage in Singapore that spans several levels, including qualified independent directors, cyber experts and digital leaders of the future
- Legal pressure on non-executive directors has caused some to question whether board service is worth the personal liability and reputational risk
Directors in Singapore said the “land grab is over” and know the next tranche of topline growth will come much harder. Companies worldwide are scrambling to reach the new Asian middle class. Competition is stiff and those with technology advantages are leading. “You can be in China without being in China,” said a director of ecommerce possibilities for companies anywhere on the globe.
Singaporean boards are keenly aware of the developments that will make or break their futures such as disintermediation, rapid product innovation, and seamless retail-banking-telecoms solutions. But access to capital has tightened and the appetite for lending has decreased, making every investment choice critical. Some boards seek external input on economic forecasts, macro trends and ways to analyze their strategic choices.
These strategic pressures combined with the regulatory compliance load on independent directors and new worries around cyber attacks are taking a toll, according to our group. They also mentioned increased personal liability and the threat of criminal consequences associated with the job of director.
In a region where the pool of director candidates is already shallow, these factors are making it difficult to recruit and retain non-executive directors and especially independent board chairs. “It’s getting to where it isn’t realistic for what is supposed to be a very part-time role,” said one board member.
Singapore has long prioritized strong management and governance practices. In that spirit, listed-company boards have diligently worked to implement new governance standards for independence, director training and risk management.
Still, our group said, the shift has been slow from founder-led "old boys networks” to diverse independent bodies. In this “insular” environment, female representation remains very low. Our group debated whether this is a supply or a demand issue, using the same arguments that have been heard in the US for several years. As in other regions, boards that are committed to adding women will have to look below the CEO level and focus on skills and experiences that are relevant to their industry and their corporate strategy.
As they make their digital transformations, companies in Singapore are vying for talent in emerging technologies. New business models that require expertise in areas such as data analytics, mobility, cloud computing, cyber security and social media are stretching boards of directors to oversee talent management and succession planning.
Directors told us that to remain relevant, boards are turning to specialist advisors and even forming advisory boards in addition to recruiting full board members from the digital domain. “This is an arms race,” said one director who believes that talent shortages will be a major factor over the next few years.