3/31/2010

How many directorships can a man handle?

This issue was discussed at SMU. JY Pillay said not more than 5 are ‘humanly possible’. I like the word humanly and the inverted commas used by the ST. I am sure there must be a distinction between humans and inhumans. Lee Suet Fern also shared Pillay’s views and added that it was ‘physically very difficult to do so many directorships because the time demands are all bunched at the same time.’ Of course she is very clear on this, she is referring only to humans and not inhumans. The Chairman of Singapore Institute of Directors (SID), John Lim, felt that ‘it should be left to the individual directors and boards to assess the matter’, and an arbitrary number should not be imposed. I am wondering if the individual directors or boards’ decision on the number of directorships is considered arbitrary or objective? Teo Soon Hoe, senior ED and group finance director of Keppel Corp, agreed with John Lim. A limiting number is unnecessary, ‘it is an individual director’s responsibility to ensure that if he sits on any board, he has time for it’. Hmmm, I think I fully agreed with the latter two. Why have regulations and arbitrary numbers to say someone is unfit to do the impossible? Everyone is different and some have inhuman abilities that humans will not understand nor comprehend. And Teo reinforced his position by stressing that it was so difficult to find good directors in this land of no talents. This I agree also. The experienced directors are so hard to come by and are precious resources to be treasured. It was reported that Lee Suet Fern had observed that ‘self regulation has not worked because there are a good number of very egregious instances where people are taking on too many directorships. It is bad for us and bad for the investing public. I accept that all guidelines are arbitrary…but sometimes it’s better to have it than have a free for all and a wild, wild East’. Again Suet Fern is talking about people, the humans, and that makes perfect sense. But if we can find inhumans that are upright and uncompromising, they will be able to act independently always, and 10 or 20 directorships would be chicken feat. Let them decide for themselves arbitrarily. Oops, no I mean independently, with their good judgement. My conclusion, we must know what we are referring to. In the case of humans and humanly possible, Pillay and Suet Fern are right. In the case of inhuman abilities and integrities, John Lim and Teo Soon Hoe are right. I rest my case.

14 comments:

Anonymous said...

Mr Bean Sir;

is it wrong for any company and organization to give directorship, chairmanship and honorific to those that will bring them, the bosses of companies, to have protection, advantage, privilege, convenience and ease to operate their businesses??????

Imagine having parliamentarians on board and the goodness and goody that come with the arrangement.

Anonymous said...

Oops !

Should have said 'with the appointment'(of directorship).

My apology.

Chua Chin Leng aka redbean said...

Yes your are right. Companies would want directors that can bring in all kinds of goodies, connections, privileged informations, influences, even unfair advantages. This is a different kind of directors and companies would like to have all the ministers in the board if they can do it.

Independent Directors a different kind of animals. They are meant to be watchdogs, to provide checks and balances, to prevent companies cheating or wrongdoings. Their roles are like policeman. How can relatives and friends act as policemen? Even gods will at times turn a blind eye.

Anonymous said...

Independence only in name lah.

You think there are judges(magistrates) idependent of their rulers(masters) who are also their paymasters ?

Poakong(Poazhen-Deity of Justice) was dead long long ago.

Anonymous said...

you should read today's economist business view article on celebrity independent directors.

Chua Chin Leng aka redbean said...

I haven't read that. But I can forsee that soon celebrities will be invited to become directors. Celebrities have values.

Celebrities are going into politics in many countries too, and won their elections quite easily.

Anonymous said...

Independent directors actually do what? Watchdogs?

Please lah, they just collect directors' fees. You think they have the time, patience or authority to tell company chairmans or directors what they should or should not do? In theory only, yes, but in reality, no.

He who pays the piper calls the tune.

Chua Chin Leng aka redbean said...

Good question. I have seen some quickly chabot, resigned, when things go wrong. Wipe their hands, pat their backsides, and no more responsibility.

Matilah_Singapura said...

Aiyah. Simple lah. Just merge all the companies into one big company and get a few govt buggers to managed and direct it. Simple.

Oh wait. That's already been done.

OK. Never mind. Singapore is a land of awesome super-human talents which makes Singapore corporate life (big time big money big business) so fun!

Let's take the case of kuching-korrupt directorships at 60k per annum -- 5k per month. Wah. You run 5 companies, because it is "humanly possible" according to the highly acclaimed academic pool at the the world-famous SMU (which ranks lower than Indian or China Business schools).

Even running 5 dog-shit corporations at 60k pa per pop, you get 300k per year.

Make sure you have your plane ticket booked so when the shit hits the fan you can chabut to Changi international before the rest of the board realises you've gone. Don't forget to cash the paycheck first.

Wally Buffet said...

In this corrupted and money mad world, there are many ways to scam and the inhumanly impossible directorships is one of them. No one and I mean no one can really fulfill his duty if he has more than 5 directorships. Anything more and he is just selling his name like a franchise. It astounds me that shareholders of public companies don't usually attend general meetings to grill the arseholes about the way the company is being run. I think it might be worthwhile to organize an Institute of Shareholders to give them a run for the money.

What do they really do when they meet in the closed boardroom? Why, have a game of poker of course, crack some horny jokes and decide where to go for a high roller game of blackjack.

Anonymous said...

The system is not corrupt. It is the people who corrupted the system.

Anonymous said...

It is corrupted men that formulate and create corrupted systems.

Chua Chin Leng aka redbean said...

Unfortunately corrupted men will not see that the system is corrupt.

Anonymous said...

I can agree with that.

They will even say proudly that they are smart enough to exploit the system.