Workplace Safety & Health - Singapore Institute of Directors

Singapore Institute of DirectorsMISSIONSTATEMENTTo promote the professionaldevelopment of directorsand corporate leaders andencourage the highest standardsof corporate governance andethical conductTHE INSTITUTE’S OBJECTIVES ARE:• To be the national association of company directors for the local businesscommunity. The SID works closely with its network of members,professionals such as accountants and lawyers, and the authorities toidentify ways to uphold and enhance standards of corporate governance.• To act as a forum for exchange of information on issues relating tocorporate governance and directorship in Singapore. The SID playsa leading role in holding discussions and providing feedback to theauthorities on matters of concern.• To organise and conduct professional training courses and seminars tomeet the needs of its members and company directors generally. Suchcourses aim to continually raise the professional standards of directors inSingapore by helping them raise their effectiveness through acquisitionof knowledge and skills.• To regularly publish newsletters, magazines and other publications toupdate members on relevant issues, keeping them informed of latestdevelopments. These publications also serve as reference materials forcompany directors.• To be responsible for the discipline of members. The SID has drawn upa code of conduct for directors in Singapore setting out the standardsto ensure they discharge their responsibilities dutifully and diligently.

CONTENTSPUBLICATION & WEBSITECOMMITTEEChairmanYeoh Oon JinPricewaterhouseCoopers LLPMembersKala AnandarajahRajah & Tann LLPAdrian ChanLee & LeeMike GrayTricor Singapore Pte LtdVictor YeoNanyang Technological UniversityAnnabelle YipWong Partnership LLPPaul ZamanQualvin Advisory Pte LtdPUBLISHERSingapore Institute of Directors3 Shenton Way #15-08Shenton HouseSingapore 068805Tel : 65 6227 2838Fax : 65 6227 9186Email: secretariat@sid.org.sgWebsite: www.sid.org.sgEDITORKala AnandarajahDESIGNWini TenorioPRINTEREntraco Printing Pte LtdPageFROM THE EDITOR 2CHAIRMAN’S MESSAGE 3SID GOVERNING COUNCIL 4COVER STORYWorkplace Safety & Health – What Have DirectorsGot To Do With It?FEATURESSpeech by Mr Gan Kim Yong, Minister for Manpower at theLaunch of the National WSH Campaign 2011, 20 April 2011Putting Your Fingerprints On Safety 13Tackling Dysfunctional Directors 15Panning For Gold In The Wake Of The Budget 18GST Risk Management For Enhanced Corporate Governance 21Who Needs Personal D&O Insurance? 24Steps For Safeguarding Cash & Critical Assets And Tightening 27Controls On Legal RepresentativesSID Corporate Membership 33EVENTS COVERAGE2-day LCD Programme in Shanghai, China 34UPCOMING TALKS/COURSES 36WELCOME ABOARD (New Members) 37611Sponsor:The Business Enablers1

FROM THEEDITORWelcome to another issue of the Directors’ Bulletin, issuedafter an exciting time of the Singapore elections. The wordsunprecedented and watershed, amongst others, have beenused on numerous occasions.In the director scene, nothing exciting, so to say, hasoccurred except perhaps recent court decisions imposingeven a custodial sentence. This is an evergreen reminder fordirectors, and independent directors at that, that the courtsin various jurisdictions scrutinise the performance by all typesof directors of their duties and responsibilities to the companyseriously. The Companies Act makes no difference as to thetype of director appointed and hence, is a clear indication thatall directors owe the same statutory duty of acting honestlyand diligently (interpreted as with due skill and care) at alltimes. What is comforting is that at common law, the courtshave been more willing to recognise that there could be adifferent level of duty owed by different directors, dependingon their specific designation and roles in the Company.What remains clear, however, is that no director can everabdicate his duties, regardless of how limited those are. Inthis light, would a director be viewed as potentially abdicatinghis duty if he simply took the position that his only role wasoversight? There are many nuances to this question and it is notpossible to provide a simple answer; although without more, Iwould take the view that a director, even an independent one,has a wider role to play than mere oversight.I started off the discussion in this issue of the Directors’Bulletin with a discussion on director duties for two reasons.First, the focus of this issue is on workplace safety andhealth. Many an un-enlightened individual would ask whathas workplace safety and health got to do with the directoror director’s duties. Everything I say. Although the relevantlegislation, ie the Workplace Safety and Health Act has beenaround since 1 March 2006, not many fully appreciate theboard’s role in ensuring workplace safety and health at theworkplace. This is discussed in the first and second articles inthis issue. The issue is particularly pertinent as the Act will beextended with effect from 1 September 2011 to apply to allworkplaces.Second, the Institute’s Annual Director Conference will beheld in September 2011. The theme for the conference isHeat or Hope - viewed from the perspective of directors. TheConference aims to respond to the many vexed questions thatcome up on exactly what is the duty, responsibility and so roleof the director. Varied panels comprising of international andlocal stakeholders will lead discussions. Do make a date withthe Institute to attend this event.Separately from directors’ duties and responsibilities,workplace safety is an important issue to manage. To this end,we are pleased to include in this issue the speech deliveredby then Minister for Manpower, Mr Gan Kim Yong, at thelaunch of the National Workplace Safety & Health campaignon 20 April on critical steps being taken to improve workplacesafety and health in Singapore. This includes a new Messengerprogramme. It is apt and a privilege for me to take thisopportunity to thank the Minister not just for allowing usto use his speech, but more importantly, for his invaluablecontributions to safety and health in Singapore. Thank youMinister and wishing you the best in your new portfolio.Workplace safety and health is not only a localised issuein Singapore but a matter viewed seriously in a number ofjurisdictions, including Australia, which recently introducedstringent rules. We have included a couple of articles fromother jurisdictions on this topic as well.It remains for me to thank all contributors to this issue, andto once again invite all to provide the Institute with articles,comments and feedback. Many thanks!Kala AnandarajahEditor2

CHAIRMAN’SMESSAGEDear fellow members,In this issue of The Directors’ Bulletin I would like to addressvery briefly an issue which has caused some anxiety amongsome members of the director community.This issue relates to the custodial sentence that was handeddown recently to an independent non-executive directorof a listed company over the accuracy and timeliness of apublic disclosure. This case which is currently under appealhas prompted several directors to ask if regulations and lawsrelating to disclosures have changed or has punishment forbreaches of such laws become more severe if found guilty.Others have sought guidance on how directors should actwhen confronted with circumstances that may require apublic disclosure.Our regulations on this subject which are embodied mainly inthe Securities and Futures Act (SFA) and the Listing Manualof the Singapore Exchange have not changed and requiredisclosures when made to be both accurate and timely. Therequirement for such timely disclosure is to ensure the markethas the information to prevent a false market in the securitiesof the company concerned. The issue for each board todecide is when an event is sufficiently significant as to requireimmediate disclosure or can such disclosure be delayed giventhe nature and circumstance of such an event, bearing in mindthe need of the market for timely and accurate informationand the need to act in the interest of the company.In order to address members’ request for some guidance onthis subject your Institute is currently preparing a guidancepaper based on the knowledge and experience of some ofour senior members. This paper is expected to be completedshortly and, when finalized, will be disseminated to allmembers. However, as no guidance paper, no matter howcomprehensive, is likely to be able to address every situation,your Institute will be organizing a special panel discussion formembers only to discuss the subject and to answer members’queries. We plan to conduct this discussion towards the endof June and after the special guidance paper has been sent toall members. Details on this will be communicated by theSecretariat shortly.In recent months the SGX has also been sending remindersto the audit committees of some companies, in particularthose with businesses located mainly or totally in China,to review and implement appropriate controls to safeguardcash and other assets of such companies and to incorporatecertain amendments or provisions in their Articles. Suchrequirements have further emphasized the importance of theroles of audit committees and of directors and the increasingneed for companies to ensure their directors are competentand are kept up to date with the latest developments inregulations, best practices and knowledge through continualtraining. In this regard, I would like to remind members whoare company directors, specially of listed companies, of thevalue of widening their search for new directors, of continualtraining and regular performance evaluation. Your Institutecurrently maintains a registry of suitably qualified memberswho have indicated their willingness to be considered fordirector positions and will soon be organizing a networkingevent with investment houses and sponsors to further promotethe Institute’s Board Appointment Services.Your Institute is also currently finalizing it’s report on the latestSingapore Board of Directors’ survey and this is expected to besent to all members in June.On June 12th we will be holding our Annual Golf Tournamentat the Sentosa Golf Club. This tournament which is ourpremier networking event has been very well supported andall available flights are once again fully taken up. We aregrateful to our many sponsors and participants, in particular,Keppel Corporation who for the second year running is ourPlatinum sponsor. All surplus generated from this event willbe utilized to support the further development of our directortraining and development programme and other initiatives ofour Institute. Emeritus Senior Minister Goh Chok Tong haskindly agreed to be the Guest of Honour for this event.On 14th September we will be hosting our Directors’Conference for 2011 at the Shangri-La Hotel. Arrangementsare being finalized for what promises to be a “must attend”corporate event for all directors and senior members of thecorporate community. More details on this Conference can befound on page 5 of this bulletin.2011 is shaping up to be another busy and productive year foryour Institute and we are grateful for the increased numberof members and corporations who have stepped forward toassist us and support our activities. I would like to take thisopportunity to thank them, the SGX and MAS for theirclose collaboration and our Council members, our variouscommittees and our Secretariat who have continued to worktirelessly for the continued advancement of good corporategovernance in Singapore.Warm regards,John KM LimChairman3

SIDGoverning Council2010/2011Chairman: Mr John Lim Kok MinFirst Vice-Chairman: Mr Reggie TheinSecond Vice-Chairman : Mr Adrian Chan PengeeTreasurer: Mr Basil ChanCouncil Members : Mr Keith Tay Ms Kala AnandarajahMr Boon Yoon ChiangMr Daniel EeMrs Yvonne GohDr Ahmad Mohd MagadMr Lim Hock SanMr Yeo Wee KiongMs Yeo Lian SimMr Yeoh Oon JinMr Willie ChengMr Andy Tan Chye Guan4

SAVETHE DATESID DIRECTORS CONFERENCE 2011Heat & Hope:The New Realities InCorporate GovernanceThe annual one-day conference organised bySingapore Institute of Directors9.00 am to 5.00 pm, Wednesday, 14 September 2011Shangri-La Hotel, SingaporeDirectors are under siege. With the financial crisis and corporate failures, the focus oncorporate oversight and performance has increased in leaps and bounds. They are asked todo more and to be more effective. With each corporate misdeed, new rules and regulationsare introduced. The accounting profession continually produces new FRS, change age-oldaccounting principles and introduce new ways of accounting that even accountants find hardto keep pace with. Legislation and compliance requirements have also greatly broadened.Concurrently, the business environment and industry context in which companies areoperating, is becoming more complex and changing rapidly. As a corollary to all these changesis the increasing liability risk of directorships.Are directors simply feeling the heat or is there hope in store?This year’s SID Directors Conference seeks to provide attendees a balanced perspective of thecurrent hot areas related to corporate governance, from the often discussed and unresolvedissues of board composition, to the role and value of auditors, and the new sustainabilityagenda. A mutli-stakeholder perspective panel discussion will provide insights and incitethinking on the issues.For those involved in corporate governance - whether as directors or as observers andsupporters - this is the corporate governance conference to attend.5

With the passing of the recent amendments tothe Act in early April 2011, all workplaces willbe covered by the Act, instead of certain classesor descriptions of workplaces that are currentlyspecified in the First Schedule to the current Act.employers. In such a scenario, placinglegal liability on the registered occupieralone may be unfair and ineffective, asthe employees of sub-contractors maychoose to ignore the safety instructionsof the occupier or carry out unsafe workpractices or introduce unsafe workprocesses without the knowledge of theoccupier.Given the above, the Act expandedresponsibility and better definedpersons who are accountable for safetyoutcomes. In this regard, a more directliability regime which assigned legalresponsibility to those who created andhad control over safety and health riskswas been created. Specifically, liabilitywill be assigned to occupiers for dangersarising from the physical environmentunder their control, whilst anotherwill assign responsibility for safety toemployers and self-employed personsrespectively.Responsibility was also extended to coverprincipals who engaged contractors forspecialised tasks or the services of workersfrom third party labour suppliers. Insuch situations, there is no contract ofemployment between the principal andthe contractor or the worker supplied.Traditionally, a principal who engagesa contractor would be engaging thespecialist services of the contractor, andwould not be directing the contractoron how to do the work. However, thispractice has changed, and principalsoften engage “contractors” and thirdparty labour not for their specialistexpertise, but precisely so that they canavoid entering into direct employmentrelationships, for organisational or otherreasons. In such situations, the principalin terms of supervision takes on the roleof an employer. The Act thus places onhim responsibility for the worker’s safetyand health as if he were his employer.If this were not the case, then theduties under the Act could be simplycircumvented by a careful crafting of thelegal relationship.The most recent amendments widenthe above by requiring the principals,even if they are not involved in directingthe work of his contractors, to still berequired to exercise reasonable care toensure the safety of the workers. Tothis end, the amendments to the Actrequire all principals to ensure thatany contractor they engage is able tocarry out the work safely, whether thesecontractors work under their directionor not.This duty on principals is not an onerousone. Contained in the new Section 14A,the requirement is still one of “reasonablypracticable” measures; ie it requiresprincipals to take only such measuresthat are “reasonably practicable”,which takes into account the levelof knowledge and expertise that theprincipal could reasonably be expectedto possess. To provide stakeholders withsome clarity on what such measureswould entail, Sections 14A(2) and14A(3) state that such measures includeascertaining that the contractor and hisemployees have sufficient experienceand training to carry out the work, andthat the contractor has conducted a riskassessment on the safety and health risksposed by the work.The Minister for Manpower in hissecond reading for the passing of theamendments in parliament in April2011 cited the following example:“For example, a principal who engagesa contractor to repair his roof shouldminimally verify that the contractor andhis employees have been trained to worksafely at heights, including the properuse of the necessary fall preventionequipment. The principal should alsobe satisfied that the contractor hasconducted a risk assessment to identifythe risks involved and the measures tomitigate such risks. A principal whohimself can be expected to possessexpertise for the work that he hascontracted out will be held to a higherstandard. For instance, if the principalis also a contractor himself, he wouldbe expected to assess whether the riskassessment conducted by the contractoris adequate and if need be, let thecontractor know what risks have notbeen adequately addressed. As withother stakeholders under the Act suchas employers and occupiers, principalswho fail to discharge these new dutieswith due diligence can be subject tothe maximum penalties allowed underWorkplace Safety and Health Act,that is, a maximum fine of S$200,000for individuals and S$500,000 forbusinesses.”The Minister further noted that therecent amendments to the Act expresslyextend responsibility and so liability forworkers who acted negligently in theworkplace and in doing so, endangeredthe safety and health of themselvesor of others. It was observed that thischange merely seeks to make the Actmore consistent internally, to allowthe Ministry to take all responsiblestakeholders to task for negligenceunder the same piece of legislation,rather than to rely on the Penal Codefor persons at work. The penalties forthe new Section 15(3A) are aligned tothose under Section 304A of the PenalCode for causing death by a negligentact and are capped at a fine of S$30,000,a jail term of 2 years or both.9

FEATURESStrong leadership must be complemented bydedicated and competent personnel to driveWSH improvements on the ground.With strong leaders and professionalsin WSH, we need to deepen ourWSH knowledge to better understandour challenges and find the rightsolutions. We must develop bettertraining programmes for our leaders,professionals and workers, as well asdevelop innovative WSH solutions toaddress pertinent concerns.WSH Institute drives effortsin focus areasWhile we have achieved some progressin the three areas that I mentioned, wemust do more to sustain our progress.The newly formed WSH Institute, whichwas first announced in July 2009, willdrive efforts in these areas as it aims to bea leading institute in WSH Knowledgeand Innovations. First, in leadership andprofessional development - the WSHInstitute will cultivate WSH leadershipethos and raise the competency of WSHprofessionals. Here, the Institute willpartner top business schools and otherInstitutes of Higher Learning (IHLs)to develop leadership programmes andexecutive WSH courses. It will alsoinvite renowned business leaders andinternational WSH experts to engagelocal leaders and professionals throughexecutive workshops.Second, the Institute will enhance WSHknowledge by developing effectivesolutions to address the issues facingindustry today. For example, in-depthapplied research into work processessuch as working at height may yieldnew solutions to help industry bettermanage the risk of falling from heights.This is one of the items in the draftnational WSH research agenda preparedby the Institute to guide its efforts. Thisdraft agenda was developed with keyindustry stakeholders and will be openfor public consultation today on theWSH Institute website. I urge you toprovide inputs to help us map out keyareas where research can build strongernational WSH capabilities. My ministryhas set aside $8 million over the next4 years to help kick-start the workoutlined in the agenda.Finally, the Institute will facilitate thepromulgation of WSH knowledgethrough its information and consultancyservices. The WSH Institute aims tobuild a repository of WSH informationand solutions that would be readilyaccessible by the industry, in orderto facilitate knowledge transfer.The Institute would also developconsultancy services and capabilities soas to offer customised WSH solutions tocompanies to help them manage theirWSH risks.Getting workplaces WSHreadyAs with previous years, the annualNWSH Campaign brings everyonetogether to keep our workplaces safe.This year, there is new meaning to this“National” Campaign. Just last week,I announced in Parliament that theWSH Act would cover all workplacesin Singapore from September 2011.These include new sectors such asretail, entertainment, administrativeservices and finance. As these sectors,while less risky, still account for 30%of work injuries and 6% of fatalities,it is important that everyone in thesesectors is mindful of workplace risks.It is, therefore, apt that this year’scampaign is held right here, in the heartof Singapore’s business district.In addition to the Campaign, as MrHeng mentioned earlier, my Ministryand the WSH Council will continueto help workplaces be WSH-ready.We will step up promotional efforts toengage all our stakeholders through TVcommercials and roadshows. While Ishan’t give the plot away, let me give youa little hint. Keep your eyes open whenyou view our new TV commercial laterand see what work risks you can spot.In line with this year’s Campaign theme,let us work together and say “No” torisks at work!Thank you.Reprinted with permission from theMinistry of Manpower.While we have achieved some progress in thethree areas that I mentioned, we must do moreto sustain our progress. The newly formed WSHInstitute, which was first announced in July2009, will drive efforts in these areas as it aimsto be a leading institute in WSH Knowledge andInnovations.12

FEATURESPutting YourFingerprintsOn SafetyBy Cormack DunnSenior Associate, Employee RelationsFreehillsOn 1 January 2012, it is anticipated thatall states and territories will introducenationally consistent occupationalhealth and safety (OH&S) legislation.For the first time, the legislation setsout what steps directors must personallytake to meet their legal obligations onworkplace safety.The consequences for directors failing tomeet these obligations are significant. Inthe most serious cases involving deathand reckless conduct, the new legislationprovides for a maximum criminalpenalty of five years’ imprisonment anda $600,000 fine. Thus, in preparingCormack Dunn discusses howdirectors can meet their legalobligations and develop saferworkplaces ahead of the likelyintroduction of nationally consistentOH&S laws next year.for the introduction of the legislation,directors will need to carefully considerwhether they are taking appropriateaction to ensure their company ismanaging its safety obligations.Directors’ DutiesUnder the Model Work Health and SafetyAct, company officers are required toexercise due diligence to ensure theircompany is appropriately managing itssafety responsibilities. The legislationplaces this obligation on companyofficers because safety regulators believethe commitment and leadership ofpeople at the senior level are essential toachieve safer workplaces.In addition to directors, the definitionof company officer includes:• Secretaries;• Managers who have the ability to affecta substantial part of the company orthe company’s financial standing;• Those who provide instructions onwhich the directors are accustomed toact; and• Receivers, administrators, liquidatorsand trustees.While the legislation does not setout all the actions company officersmust take to meet their due-diligenceobligations, under the legislation theyare required to:• Have a good knowledge of safetymatters;13

FEATURESTacklingDysfunctionalDirectorsBy Stephen A MilesVice-ChairmanHeidrick & StrugglesC h a i r m e nsometimesturn a blind eye to underperformingdirectors and address the issue only whenit has got out of hand. The problem isthat by then, the media almost certainlyknows about it and suddenly thecorporate dirty linen is being aired inthe full glare of publicity.Even iconic companies are not immuneto missteps, as we saw with thesimultaneous departure of the CEO andchairman from one major corporation,triggering a board shake-up andrevealing a weakness in the company’ssuccession process.Stephen A Miles provides sometips on how to spot a dysfunctionaldirector and how to remove himor her.Underperformance clues are there forall to see and vary from organisation toorganisation. A useful set of indicatorsis given by the dean of the Universityof Toronto’s Rotman School ofManagement, Roger Martin. Amongother things, he says chairmen shouldwatch out for a director who:• Talks about the directors’ fees notbeing high enough to compensate forthe onerous work involved;• Expresses excessive pride over beingon the board; and• Shows enthusiasm for the personalgrowth opportunities the boardprovides him or her.The line of sight from the board tomanagement is often opaque. Unlessstrong chairmen and directors drilldown into key issues and questionmanagement with some rigour, theboard will hear only what managementwants it to hear.The global financial crisis sifted throughcorporations like wheat, and those thathad sown the wind with leverage andhubris suddenly reaped the whirlwind.Boards found themselves embroiled inpublic scandal and we saw a successionof and senior leaders depart the executivesuite. However, the difference betweenthe effect on directors and the executivesis stark. The board is legally liable for theoversight, but executive perpetrators getpaid handsomely on the way out!Today more than ever, having a highperformingboard is a critical successfactor for company leadership and15

FEATURESChairmen sometimes turn a blind eye tounderperforming directors and address the issueonly when it has got out of hand. The problemis that by then, the media almost certainly knowsabout it and suddenly the corporate dirty linen isbeing aired in the full glare of publicity.performance. Chairmen, non-executivedirectors and CEOs are challenged toperform effectively as a group, debatingthe issues, making critical decisions,formulating strategy and executingsuccession planning processes. It isno longer acceptable for one or moreboard member to be along for the ride.Companies and shareholders simplycannot afford it.Hire On Skill, Fire On FitSo what is a chairman to do? To statethe obvious, the ideal is to get directorselection and recruiting right at thestart of the process. But selecting thebest people in terms of experience andbusiness expertise is a given. The hardestpart is often the cultural “fit”.With executives, we often say youhire on skill and fire on fit. Similarly,if directors don’t fit, the dynamicsaround the boardroom table changedramatically. Bad behaviour that mayfly under the radar until real damage isdone include:• Engaging in bilateral conversationswith other board members outsidethe boardroom in an attempt to prealignon topics before they reach thefull board;• Leaking sensitive information to themedia;• Being habitually unprepared andtherefore unable to contribute at ameaningful level; and• Being overly aggressive and combative,assuming everyone is “bad”, ratherthan asking the difficult questionsin a direct yet supportive manner,allowing for a “discussion” rather thana position-based argument or fight.Such behaviour erodes trust and dragsdown the board’s effectiveness andperformance.The director selection process needs tobe robust. No matter how well-known acandidate may be to other directors, heor she must still go through a rigorousprocess.When we interview directors, weoften assign different tasks to differentconsultants. Board members shouldalso divide up the interviewing, withone person exploring a candidate’sexperience and another assessing thecultural fit. If you don’t do this, yousimply engage in the same interviewmultiple times, which is much lesseffective. Additionally, a tandeminterview can be powerful, providingfor two viewpoints to then be debatedin greater detail later. Directors shouldalso meet the candidate in formal andinformal settings.The key in director selection andrecruiting is to not make it a secretprocess in a hidden committee that lackstransparency to the full board. This is anactivity the full board should be engagedin.Diagnosis TrumpsDysfunctionA major inconsistency between directorsand executives is that while CEOs arerapidly removed when performanceslips, directors are not usually heldto account by the same standard.I recommend chairmen deal withdirector performance before it becomesdysfunctional and affects reputation andshare price. The best way to do this is forthe chairman to enter into “diagnostic”mode to draw out the factors causingthe underperformance.Underperformance might be caused by:• Over-commitment in other professionalareas;• Health or family issues;• Political undermining of the rest ofthe board;• Poor cultural fit;• Being too “executive” in trying to runthe company; or• His or her original expertise isexhausted as the company begins tofocus on other strategic fronts.Professional diagnosis will quickly sortout the causes and suggest responses.It does no good guessing, or lettingthe dysfunction fester or leak intomanagement ranks.Underperformance can range from anover-committed director who is less ableThe global financial crisis sifted throughcorporations like wheat, and those that hadsown the wind with leverage and hubrissuddenly reaped the whirlwind. Boards foundthemselves embroiled in public scandal and wesaw a succession of and senior leaders depart theexecutive suite.16

FEATURESPanning ForGold In TheWake Of TheBudgetBy David J SandisonPartner, Corporate TaxPricewaterhouseCoopers LLPIt was of little surprise that it was slim pickings forthe corporate taxpayer in the 2011 Budget. Witha general election just round the corner (in trueSingapore fashion acronymed to GE), a significantthreat of inflation, and a generally contented multinationalgroup getting back into action after theglobal financial crisis (GFC), there was little doubtas to where attention would be directed.Nevertheless, in raking over the coalsafter the dust has settled, there are acouple of interesting nuggets to befound for businesses, in particular thesmall and medium sized enterprises(SMEs!). These revolve around theProductivity and Innovation Credit(PIC), the Equity-based remunerationschemes (EBRS) and one or two otherconcessions introduced, although somethat had the appearance of gold nuggets(GNs) on first sight seem to havetarnished on closer examination intoNSGNs (Not so gold nuggets).PICMost of you will remember theintroduction of the productivity andinnovation credit that was initiallybrought into being in the 2010 Budget.This incentive package was aimed atproviding enhanced tax deductionsfor six categories of activities that wereconsidered key to Singapore’s aspirationsto increase productivity and worktowards a world class knowledge basedeconomy. These six categories wereResearch and Development (R&D),Design work (both done in Singapore),Acquisition of intellectual property (IP),Registration of IP, Automation throughtechnology or software, and Training ofemployees.Obviously, not every business will beinvolved in R&D or design work andit is not every day you acquire or comeup with some wonderful new inventionthat needs to be patented. Howeverthe last two categories do seem to offersome pretty attainable benefits as everybusines these days has computers, andmost businesses with staff (can’t thinkof one that doesn’t have any) probablyeither train or should think abouttraining them.18

When first introduced, the PIC offeredtax deductions of up to 250% of thequalifying expenditure, subject to anexpenditure cap of $300,000 for eachqualifying activity, per year. The firstgood news from the 2011 Budgetwas that the expenditure limit is to beincreased to $400,000 and the 250%deduction is to be raised to 400%. Thismeans that for every dollar of qualifyingexpenditure, the government will fund68% of it. So if you hit the maximumspending limit for a particular category,the government will throw in $272,000.You may be thinking, “Well, thatshould only be $204,000, because Iam already getting deductions for theactual expenditure of $400,000” (at thecorporate tax rate of 17%). Howeverthe point to note is that not all theexpenditure in question might ordinarilyrank for deduction according to normalprinciples, and so in some cases the full$272,000 is being made available.The other helpful feature of the 2011Budget enhancements is that certainyears can be grouped together, so thatuneven expenditure can be captured.The years pooled are years of assessment(YAs) 2011 and 2012 (making anaggregate of expenditure of $800,000for those two years) and YAs 2013 to2015 (totalling $1,200,000). In otherwords, if you spend only $300,000 ofqualifying expenditure in YA 2011, youhave the balance of $500,000 left tospend in 2012. Why all five years werenot just lumped together does requiresome working out, however leaving a bitof mystery on the table may help keepinterest levels up.The Devil as they say, is generally in thedetail, and there is still quite a bit aboutthe scheme that makes it somewhatcumbersome and difficult to use.However, sometimes you can find littleangels too. The qualifying expenditureunder the scheme is tied in with theIncome Tax (Automation Equipment)Rules 2004 as amended by the samein 2010. I will not trouble you withthe detail here (as there is a lot of it).However the items that qualify seem toinclude just about everything in youroffice you can plug in and could throwa stick at, as well as many from a wholehost of industrial and service relatedactivities. Some I am not sure even exist.(What, for example, is “Automatedhousekeeping equipment includingany mattress lifting equipment forhospitality related operations”?(Whatever happened to the chambermaid?). And can anybody describe forme what you use a “Ride-on power floatmachine for”?One other interesting feature is thatqualifying expenditure also includesexpenditure on leasing any of theequipment described. You do not needto be on NASA’s headhunt list to workout that if the cost of the item is wellabove the annual limits, by spreadingthe costs over the life of a lease or on hirepurchase, you may be able to massagethe cashflows to take advantage of thespending caps. For example an assetthat costs $2 million would only have$400,000 qualify if bought it in yearone. However under, say, a finance leaseover five years.....The same message goes for trainingcosts, which broadly cover costs incurredon in-house training (i.e. SingaporeWorkforce Development Agency(WDA) certified, Institute of TechnicalEducation (ITE) certified), or, quitesimply, all external training.My point is that this is an area reallyworth looking at if you want somelow-hanging fruit from the PIC, andit presents an opportunity not to bemissed. So get out your chequebook andgo shopping.EBRSThe problem with EBRS has primarilybeen with the deductibilty of costsassociated with providing the employeeswith shares. Typically in Singapore we seelisted companies with subsidiaries herewhere the local employees participate inshare option schemes over the shares inthe listed parent company.The Inland Revenue Authority ofSingapore (IRAS) has always taken theview that where the shares acquired bythe employees on exercise were freshlyissued, then there was no outlay tothe group and thus, even if the parentcompany made a recharge for thenotional cost of issue (ie the differencebetween the market price and thestrike price for the employee), no taxdeduction was available. Despite manyyears of dispute, the IRAS view hadalmost come to be accepted by thetaxpaying population. However, it wasalso tacitly accepted that where realcosts were involved, these would bedeductible as employee remunerationcosts.Enter the treasury share. The treasuryshare was a concept that had not existedin Singapore corporate law until 2005.Essentially, it is a listed share that thecompany has bought back from themarket but which has not been cancelled.The company is thus registered as theowner. Typically treasury shares wouldbe bought in for the purpose of givingout to employees under their EBRS, andthere might be a pool of them bought inwhen market timing was right.Because treasury shares are recorded asan asset in the books of the companyand not as an expense, it was not clearwhether a deduction would be availablefor them. Enter tax legisltaion fortreasury shares (and the problems).The law was very kindly changed toaccommodate the purchase price oftreasury shares (less any recoveriesfrom the employee) as a deductibleexpense. However, the legislation inthe Income Tax Act (ITA) so drafted,had the (we suspect) unintended effectof disallowing costs that had previouslyranked for deduction. Baby was thrownout with the bathwater.19

FEATURESThe situation that this change in thelaw most commonly affected was whereemployee benefit trusts were involved.The role of such a trust was to acquireshares in the market and hold themon behalf of the employees, chargingthe company, as it did, for the costof the purchase. There was thus anundeniable cost to the group under sucharrangements and typically a good casefor deduction – until the treasury sharelegislation was brought into effect in theITA.Fortunately and after significantlobbying, a change to the law wasannounced in the Budget. Unfortunatelyrather than allowing a reversion to basicprinciples such that if a cost is incurred(in whatever shape or form) it shouldbe deductible, a more perescriptiveapproach was taken. A deduction nowwill be available for actual costs ofsatisfying obligations under an EBRS.However this will happen only wherea special purpose vehicle, in the formof company or trust, is set up for thepurpose.Nothwithstanding this, it has to be saidthat some improvement is better than noimprovement at all; and so taxpayers cango back to simply worring about whyon earth there needs to be a provisionunder FRS 102 in their accounts, whenan option is granted.Pre-CommencementExpensesWhere a new business starts up,certain expenses will be incurred thatare required to get the company ina position to commence its incomegenerating activities. These are tobe contrasted with expenses that areincurred in the operation of the businessonce it has started. The distinction isthat so-called “pre-commencement”expenses are not deductible for taxpurposes, whereas normal operationalexpenses are. To date the IRAS havetaken a fairly blunt instrument to dealwith this distinction, taking the viewthat you have not commenced businessuntil you have earned your first dollarof income, which of course we all knowdoes not make a lot of sense in the realworld.While there has been a circularattempting to clarify the issue in thepast, and a concession that allows ataxpayer to go back to the beginningof the accounting year in which thefirst dollar was earned, the IRAS havestill stuck to the “first dollar” principle.Without letting go of this concept, the2011 Budget did improve things byallowing taxpayers then go back oneyear even further. The concept is that thetaxpayer is deemed to have incurred allexpenses that fall within that timeframeon the day he earns his first dollar. Notexactly a gold nugget, but certainly astep in the right direction to help startupsget off to a less expensive start thanhas been the case in the past.Pooling Of Foreign TaxCreditsThis change I would place in the NSGNclass. While on the face of it, the abilityto pool foreign tax credits (FTCs) wouldappear to be a significant concession,when the practicalities are examined, itis not as exciting as it may seem. Hereis why.Currently, foreign tax paid on incomereceived in Singapore by companies isgiven as a credit against the Singaporetax payable on that specific source ofincome. To the extent the foreign taxexceeds the Singapore tax, the excess islost. So if you suffer 20% withholdingtax on interest income there should beno tax to pay in Singapore as the creditis greater than the 17% Singaporecorporate tax on that income. However,the additional 3% is wasted.The pooling system introduced in theBudget now allows that wasted 3% to beused against other streams of income thathave a shortfall. For example, incomethat has suffered foreign withholdingtax at 10%, will leave another 7% ofSingapore tax payable. Under the newsystem, this can be partly absorbed bythe excess 3% on the other income,leaving only 4% payable.Brilliant you might think. Well brilliantif you happen to be lucky enough torun a company that does not have anyexpenses. The problem is that mostcompanies do, and there will be a need,generally, to allocate expenses to theforeign sourced income (typically this isdone on a formula basis). This reducesthe amount of Singapore tax that wouldbe payable, and thus creates more excessforeign tax credits. To use the exampleabove, let us say that each income streamproduces net income of, say, $40 out ofthe gross $100 income. I am not goingto do the maths for you, but underthe existing system, there would be noSingapore tax payable. Under the newsystem there would be no Singaporetax payable. I am struggling to see thebenefit here. It is only when you canboast margins of over 60% on yourincome, that the pooling system startsto show some glimmer of advantage.Undoubtedly there may be strategiesfor massaging this concept around, andof course the outcome depends on theactual facts, but the point I am makingis that this is not a major step forward.A shinier nugget would have come inthe form of total exemption for foreignsourced income, which is what is onoffer in Hong Kong and Malaysia.Gold In Them Thar’ HillsOn balance, it was not therefore asbarren a Budget as it might have seemed,and there may still be rewards to be hadfor the hardy prospecter. Hopefully, thedistant hills of Budget 2012 will yieldbetter results. In the meantime however,it is always worth remembering, that allthat glisters is not gold.20

Board of directors and senior management shouldtake interest in proper tax risk management tosafeguard the corporate reputation.$500,000 in GST has been recoveredfrom each of these companies.These results signal the need forcompanies to strengthen their controlsand processes to manage GST risks.Otherwise, the implications arisingfrom weak managerial controls andaccounting for GST would affect thewhole enterprise significantly.Tax Risk ManagementAs tax naturally fits within the ethos ofgood corporate governance, managingtax risks enables company directors todischarge their responsibility to theauthorities, investors, employees andother stakeholders. In addition, taxgovernance, if designed and executedcorrectly, can help protect stakeholders’rights and interests, manage a company’srisk profile and create long term businessvalue to the enterprise.To establish effective internal controlsfor tax, the board of directors need toset the right tone at the top. The boardcan cultivate an internal corporateenvironment that defines parametersto handle tax matters appropriately, inline with the overall business agenda.This includes making a commitment tocomply with tax laws and regulations,defining roles and responsibilities formanaging tax issues, and putting inplace a monitoring mechanism ensuringongoing compliance.In addition to the above, adequatecommunication can also be maintainedby the board to the internal andexternal stakeholders in addressingtax requirements, information anddisclosure. With the right messagesent across the enterprise, appropriateinternal tax controls can be consistentlyimplemented to support a proactivetax risk management framework thatminimizes exposure to tax risks andincrease profits.ACAP - New GST InitiativeFor Tax Risk ManagementTo motivate companies to be proactiveand committed to ensure thatinternal controls are robust on anongoing basis, “Assisted ComplianceAssurance Programme” or ACAP hasbeen designed as a holistic solution thathelps companies to self-manage theirGST risks.ACAP provides step-by step guidancefor companies to independently assessthe effectiveness of their GST internalcontrols at three critical levels, namely,the entity, transaction and GSTreporting levels.To embark on ACAP, your companymay either choose to undertake thisin-house with the help of the InternalAudit Team or engage a CPA firm orits tax affiliate as the ACAP Reviewerfor the exercise. Based on the findings,IRAS may accord your company eithera Premium or Merit status, based on thestandard guidance provided by IRAS.Benefits Of ACAPA company endorsed with an ACAPstatus would have a high level ofcertainty that their business transactionsare running smoothly without majorrisk exposure to GST errors. As ACAPemphasises controls at the entity andtransaction flow levels, the requisitecontrols will help companies addresscompliance at source, and enable thecompany to prevent or identify GSTerrors on a timely basis. In the long run,this will help companies reduce GSTcompliance costs even as the businessgrows.In addition, an ACAP approvedcompany is entitled to the followingbenefits for 3 to 5 years:• Exemption of GST audits by IRAS• Dedicated IRAS officer to handleGST rulings and resolve GST issuesexpeditiously• Automatic renewals of GST schemes• Expeditious GST refundsCompanies that voluntarily participatein this initiative would be able toprovide its stakeholders with thenecessary reassurance that tax is notbeing managed to the detriment of theirinterests.IRAS Co-Funds 50% OnCost Of Engaging An ACAPReviewerTo encourage companies to undertakeACAP, IRAS will co-fund 50% ofthe fees incurred, subject to a cap of$50,000 per ACAP applicant. IRAS willalso grant a one-time waiver of penaltiesfor past non-fraudulent GST errorsdisclosed voluntarily in the course of theAs tax naturally fits within the ethos of goodcorporate governance, managing tax risks enablescompany directors to discharge their responsibilityto the authorities, investors, employees and otherstakeholders.22

first ACAP Review undertaken by theACAP applicant.What The BusinessCommunity Is Saying AboutACAPSince the launch of ACAP, severalcorporations in Singapore havealready committed or shown interestto participate in the new initiative.PT. Trakindo Utama, Cold Storageand Singtel are amongst the first tostep forward in undertaking ACAPaccreditation.Ms Fang Fang, Singtel’s GroupTax Director, said: “ACAP willenhance standards of financial andtax management amongst Singaporecompanies.”Teng Bee Suan, Vice President (GroupTax) of Sembcorp Marine Ltd, welcomesthe scheme. “With ACAP, corporationsare required to do a self-assessment oftheir GST control framework. Whilethis entails adaptation to the prescribedacceptable controls during the initialreview process, corporations wouldbenefit from this exercise as it createsa preventive and detective controlframework for proper GST compliance.”“This type of GST audit programme isthe wave of the future”, comments MrRobert Tsang, Deloitte’s Director forTax. “Experience from North Americaand Europe shows that the early adoptersin these sorts of programmes do thebest in minimising the impact on theirbusinesses. Those who move quickly cansecure the best positions.”ACAP provides a means for companiesTo motivate companies to be pro-active andcommitted to ensure that internal controls arerobust on an ongoing basis, “Assisted ComplianceAssurance Programme” or ACAP has been designedas a holistic solution that helps companies to selfmanagetheir GST risks.to proactively manage GST risks andensure compliance. By integrating taxrisks management with wider corporategovernance, ACAP presents theopportunity for companies to partnerthe tax authority in enhancing overallGST compliance.As company directors, consider carefullythe benefits of ACAP and put thecompany on track towards better GSTcompliance.For more information, please visitwww.iras.gov.sg.The article is contributed by the InlandRevenue Authority of Singapore.23

FEATURESWho NeedsPersonal D&OInsurance?By Michael GriffithsDirector of Professional ServicesAon SingaporeIf you were a director of a company in Singaporebefore 1997, then chances are that you were notcovered by D&O Insurance. Throughout the Asia-Pacific region, for that matter, D&O Insurance wasonce in very low demand. Then the Asian financialcrisis erupted. In the space of just a few months,the Thai stock market dropped by 75%, Indonesia’sofficial interest rates reached 65%, and in Korea bothKia motors and Daewoo Motors were acquired underrescue packages.The Rise of D&O InsuranceAsian economies recovered from thecrisis, but as foreign capital was investedinto newly-privatized companies achange in the attitude of Asia’s directorsemerged. The dramatic events of thecrisis had heightened awareness of therisks faced by directors. There wasa new and heightened awareness ofthe importance of sound corporategovernance, championed by theSingapore Institute of Directors andother organizations. Directors ofAsian companies also began to thinkdifferently about D&O Insurance,to the extent that by 2006 a Lloyd’sUnderwriters survey would reveal that63% of Asian directors consideredD&O Insurance either “important” or“extremely important”. All the signsindicated that throughout Asia, butparticularly in more developed countrieslike Singapore, there would be a boomin legal actions against directors and acorresponding boom in the demand forD&O Insurance.The Singapore ExperienceSo, has Singapore experienced this boom?Well, not exactly. In the last few yearsthere has been an undoubted increasein the number of legal actions againstdirectors, particularly those brought bySingapore’s regulatory authorities, butnot the predicted explosion of litigation.It is also clear that more companies inSingapore are buying D&O Insurancethan ever before, but it is still not amainstream class of insurance. What wehave seen in Singapore is a gradual shift24

ADVERTORIALPersonal D & OInsuranceMany Singapore company directors worry that theircompany does not buy or renew D&O Liabilityinsurance, that the coverage is not adequate, or that thepolicy may not be activated to protect them when theneed arises. For directors who resign or retire, there isno guarantee that cover will be still be available shouldthey be subsequently targeted in a legal action.Wouldn’t it be nice if you could buy an extra levelof protection on your own?NOW YOU CAN. Aon Singapore in partnership with the Singapore Instituteof Directors (SID) has developed Singapore’s first ever Personal D&O Insurancepolicy. With a limit of up to S$1 million and cover for up to 3 separatedirectorships, you can now decide for yourself the level of protection you desire.This policy covers costs incurred in defending a claim, plus settlements andawards of damages and costs. It is exclusively underwritten by Allianz InsuranceCompany of Singapore for members of SID (SID has arranged this coverage asan additional service to its members and has no financial benefits whatsoever inthis arrangement).If you have always wanted a D&O policy with your name printed on it and alimit that will be there when you need it, then this policy is for you. Becausewhen it comes to protecting your personal assets, sometimes you need somethingall to yourself.Please contact SID at telephone no. 6227 2838 for more information or call Ms Gladys Ng,Aon Singapore at telephone no. 6239 8880 for an over-the-phone quotation.26

FEATUREFor companies listed in China and Hong Kong,auditors must generate reports on the use ofproceeds. So, for companies listed in HongKong wanting to raise a further round of funds,they must explain how funds raised during theirprevious fund-raising exercise was used.with the bank and (ii) the bank willprovide monthly statements to the listedcompany on how the proceeds are used.Further, if there is a withdrawal from thebank that exceeds a certain amount, thesponsor must be informed. For example,if a withdrawal threshold of twenty percent (20%) is reached, the bank mustprovide the listed company and thesponsor with a bank statement whichstates how the money was used.For companies listed in China andHong Kong, auditors must generatereports on the use of proceeds. So, forcompanies listed in Hong Kong wantingto raise a further round of funds, theymust explain how funds raised duringtheir previous fund-raising exercise wasused.Some Chinese companies have stringentinternal controls. For instance, somewill insist that major bank accounts areonly operated with banks with Internetbanking facilities. For Internet banking,two (2) codes or keys are needed. One(1) of these codes or keys will usuallybe mainly held by the Chief FinancialOfficer (CFO) while the other will beheld by another party appointed bythe parent company from Singapore.Therefore, one (1) of the code or keysfor Internet banking can be held by aSingapore executive from the parentcompany. Hence, whenever paymentsare made through the bank, effectivemonitoring of any movements in theaccounts can be conducted rathereasily. In short, Internet banking helpsto prevent any unilateral and majordisbursements of funds. Additionally,a company’s finance department canbe required to provide a monthlylist of disbursements (e.g. exceedingS$200,000) indicated on the bankaccounts by detailing the purposeand payees of the disbursements. Inaddition, checks on cash balances can bedone by Internet banking.Q: Are there any issues with thevalidation of cash?A: The process of validation of cash is noeasy task. There are four (4) issues thatmust be considered when companiesdecide to conduct cash validation.The first issue is the frequency of thecash validation process. For instance,companies must consider whether thecash validation process should only beconducted at the end of the financialyear or on a quarterly basis. Thesecond issue is that of the nature andextent of the cash validation process.Companies must consider whether themanagement in China (e.g. Chairman)30

can dictate which bank officialsauditors can communicate with inrelation to conducting cash validationso as to minimise the possibility of anycollusion. The third issue is whether toaccept the validity of any cash validationreport from the bank if bank officialstake a relatively long time to completethe process. The fourth and final issueis one of timing. Companies shouldconsider conducting validation checksat the end of the financial year (period)instead of a few months after this periodwhen the accounts are to be signed bythe auditors.Q: Are changes to a company’s articlesof association effective in removinga legal representative given that heor she can simply be dismissed byfiling the necessary forms with theauthorities?A: As S-chips have been recently hitby accounting scandals, it is vital thatthese companies take stock of situationand closely examine their articles ofassociation. Generally, the company’sarticles of association will not specificallydetail how a legal representative shouldbe appointed or removed.For instance, the articles of associationof some companies may dictate that alegal representative should be a certainindividual (who is the controllingshareholder himself or his associate).Further, there may be a provision to theeffect that the legal representative shouldassume office for a period of three (3)years but nothing may be mentionedabout the process of his or her removal.Clearly, such a provision is faulty.Therefore, uncertainty will arise andmuch time and money will be spent onengaging lawyers to research the relevantlaws on how a legal representative canbe removed. Ultimately, the parentcompany will have the power to removethe Board of a subsidiary companyin China. However, if the Articles ofAssociation of the relevant subsidiaryare unclear, embarking on the path ofremoving a legal representative will be amost onerous task.Q: Even if the parent companyhas the power to remove the legalrepresentative, what are the likelydifficulties to be encountered whenimplementing steps for the legalrepresentative’s removal?A: Articles of association may beamended to bestow the parent companywith the power to remove the legalrepresentative. However, the litmus testwill be whether the authorities in Chinawill recognise the legal implicationsof such a power. For example, alegal representative can be held to bepersonally liable for not resolving a wagedispute and thus incarcerated by theChinese authorities because the doctrineof separate legal entity does not applyin China. In China, a company’s topArticles of association may be amended to bestowthe parent company with the power to removethe legal representative.executive, and not the company itself, isusually the party held responsible for thecompany’s acts.In the example cited above, the onlyrecourse open to the affected legalrepresentative will be to raise sufficientfunds and pay off any outstandingwages before he or she can be releasedfrom prison. Therefore, it is vital thatcompanies foster strong ties withthe Chinese authorities so that theirco-operation can be relied upon forsituations such as the one listed in theexample and also for cases involvingremoval of a legal representative.The importance of acquiring theco-operation of the authorities inChina is made abundantly clear whenimplementing steps to remove a legalrepresentative. In China, the processof removing a legal representativebegins with a submission to theState Administration of Industryand Commerce (SAIC). The SAICwill require various documents to besubmitted by the company, whichinclude a stamped registration form(denoting the new legal representative),company licence and other supportingdocuments. To circumvent the needfor forms to be stamped by anyseal(s), companies should prepare suchdocuments in advance.31

checks.Therefore, companies must not whollyrely on their auditors to unearthdiscrepancies or irregularities during thecourse of conducting their audit checks.Instead, companies should conductregular checks and have in placeproper internal control procedures.In additional, the underlying reasons,transactions and documents giving riseto the cash balances should be closelyreviewed and verified.ConclusionIn some parts of China, the local banks andentrepreneurs are so adept at colluding witheach other that almost any document can befabricated or forged. Therefore, even if extremelyexperienced and capable auditors are engagedto perform checks on a company’s accounts, itmay be extremely hard for them to detect thatsomething is amiss.Q: Can using qualified auditorsto conduct thorough checks of acompany’s accounts totally preventfraud from occurring?A: Unfortunately, no. In someparts of China, the local banks andentrepreneurs are so adept at colludingwith each other that almost anydocument can be fabricated or forged.Therefore, even if extremely experiencedand capable auditors are engagedto perform checks on a company’saccounts, it may be extremely hard forthem to detect that something is amiss.Nonetheless, auditors must still bevery careful and exercise due care andutmost professionalism to ensure thatall necessary steps and procedures areexecuted during the course of any auditThe financial scandals unearthed inrecent times serve to remind companiesthat they must perform periodic checksto identify situations where theirsubsidiaries in China do not have clearprocesses to remove their respective legalrepresentatives. If the company’s articlesare not specific on this point, the processof removing its legal representative willpresent more difficulties if such a needarises.SGX’s reminder to S-chips to reviewtheir internal controls and reduceexposure to risk will benefit shareholdersin the long-term. As the world continuesto globalise, China will continue tofoster trade with more countries andalso adopt international codes ofbusiness practice. Therefore, it is vitalthat individuals and corporations alikefamiliarise and adhere to China’s legalframework in order to facilitate smoothpassage for their business expansionplans in China.32

CorporateMembershipSchemeThe Corporate Membership scheme, a new initiative of theInstitute, is introduced to encourage and enhance supportfrom companies the Institute’s pursuit of improving andraising the standard of corporate governance practices inSingapore.By joining as Corporate Members, companies will signify their support for good corporategovernance practices and will have full access to continuing professional training of their boarddirectors and senior management as well as stay abreast of the latest developments in corporategovernance practices.To encourage companies to sign up as Corporate Members, the Institute is offering a range ofbenefits, which include:• Complimentary membership for one Principal Nominee from each company and waiver of entrancefees for two Supplementary Nominees who are directors and/or senior management staff.• Complimentary use of SID Board Appointment Service, once every year, in the company’s searchfor suitable independent non-executive directors.• Two complimentary invitations to SID Annual Corporate Governance Conference.• Complimentary vouchers worth a total of $1,200 to attend training courses organised by theInstitute.• Complimentary copies of the Institute’s corporate governance related guidebooks.• Discounts for advertisements placed in The Directors’ Bulletin.For an annual membership fee of $2,400 (plus GST), Corporate Members receive benefits with amonetary value of about $7,000 each year.Membership is open to any body corporate or entity formed, incorporated or registered inSingapore or elsewhere that has its affairs directed or managed by a board or council of directors ormembers and which supports and practises good corporate governance.33

EVENTS2-day LCDProgrammein Shanghai,ChinaThe first Mandarin LCDDirector Certificationprogramme was held inBeijing, China, from 25October to 27 October2010 and was wellreceived.On 10 and 11 March 2011, SID heldher Second Mandarin LCD DirectorCertification programme in Shanghai,China. It was attended mainly bydirectors of Chinese listed companies.Mr Richard Teng, Senior Vice President,Head of Issuer Regulation, SingaporeExchange, gave the opening address.The speakers were Hee Theng Fong,then Partner, KhattarWong, Lim LeeMeng, Senior Partner, RSM ChioLim and Ng Siew Quan, Partner,PricewaterhouseCoopers LLP.Panel discussion from left: Richard Teng, Ng Siew Ouan, Hee Theng Fong, SovannGiang and Lim Lee Meng34

Upcoming Talks/CoursesUpcoming EventsJUNE 2011Thursday, 2 June 2011Whistleblowing Policy That WorksWednesday, 8 June 2011 LCD Director Certification Programme Module 1Listed Company Director Essentials: Understanding the RegulatoryEnvironment in Singapore: What Every Director Ought to KnowWednesday, 29 June 2011 GEM Director Certification Programme Module 5Practical Guide for Investor and Media RelationsJULY 2011Tuesday, 5 July 2011 LCD Director Certification Programme Module 2Audit Committee EssentialsWednesday, 13 July 2011SID-SGX 1-day Listed Company Directors Development Programme(Mandarin) in Xiamen, ChinaTuesday, 19 July 2011 LCD Director Certification Programme Module 3Risk Management EssentialsSID-SMU Executive Certificate in DirectorshipModules Programme Dates Assessment DateModule 3: Finance for Directors Monday, 20 June 2011Tuesday, 21 June 2011Wednesday, 22 June 2011Wednesday, 29 June 2011Module 5: Leading from theBoard of DirectorsThursday, 28 July 2011Friday, 29 July 2011Take home assessment36

Welcome AboardFebruary 2011AsiantoRobbyKhooJoo Lin LenaTanKian ChewBanatiAmitLeeFook Wah FrancisTeoSiew MayChanKok FaiLinRebekahWebbDarylChongEe Yong StephenMerszeiLeslie GeorgeFongKeng YeowNgKian ChuanMarch 2011BierRobHemrajaniAshaReidKennethBriantMichael JohnJohnstonPhilSereneDavidChanHui YuhLaiKeng WeiTanKah KoonChanWei TingLeongChoon Fai MichaelTanHai BengChayWai ChuenLimKeng ChongTeoHong LimChengLai Yuk HildaLongRossYeoMeng HinChinChee ChoonMaknawiRatnaYeungShun Meng StephenChinnuPalaniveluNgChai ChoeyYongTeng WeiCrothersWilliam ChristopherOngSiew ChinYoongEe ChuanFuHaoPanPeiwenCall for articles, thoughts,snippets, etc.The institute would like to hear from you. Send us aricles, thoughts or evenshort snippets of issues that you are keen on, that you want to share about,or that keeps you awake at night. It only needs to relate to directors and/orcorporate governance. For articles, keep it to 1200 to 1500 words at most.Send your materials by email to the Institute at secretariat@sid.org.sg37