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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published April 9, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>SIAS: Need for caps on directorships
Four for those with full-time job, otherwise six: David Gerald
By MICHELLE QUAH
FOUR if you have a full-time job and six if you don't - these are the limits Securities Investors Association of Singapore (SIAS) chief David Gerald believes should be applied to the number of directorships an individual can hold.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Gerald: All companies should disclose in their annual reports the number of directorships each of their directors holds </TD></TR></TBODY></TABLE>He also believes investors here should take a cue from their counterparts abroad - and actively question directors on their commitments and abilities, and boards on their nomination processes.
Joining the spirited debate over whether there should be a cap on the number of directorships, Mr Gerald told BT that Singapore needs a guideline restricting individual directorships to safeguard shareholders' interests.
'The responsibilities of a director have changed much over the years,' he said. 'Now, you have to sit on various committees - such as the audit committee, remuneration committee and nominating committee - and go through numerous reports. The responsibilities are heavy and you need to be extremely focused and dedicated to do the job well.
'While I understand that an individual himself can decide what he is capable of, and that a board decides who it wants to appoint, I still believe it's better to have a guideline suggesting the number of boards a person can sit on.
'I read a research report recently that says a person should hold no more than four directorships if they have a full-time job and no more than six directorships if they don't. I believe - given the work and dedication required - that this ought to be the limit.'
As the head of the investors watchdog group, Mr Gerald also believes minority shareholders have a key role to play: 'They have the right to question the director being appointed - they should question the person's background, the number of directorships they hold, their contribution to other boards, what they will bring to this board and their knowledge of the company and its business.
'In all my years championing shareholder activism, I've realised that investors here seldom ask these questions. And many feel there's little point asking because the majority vote will always prevail and the director will be appointed no matter what issues the minorities raise.
'Still, I believe the minorities need to keep asking - keep bringing up these issues and putting them on the table. This will raise consciousness and send a clear message to boards and majority shareholders that the minorities are aware of the issues and will question them.'
The SIAS chief said this is common practice in countries like Australia and New Zealand, where directors have to field questions from shareholders on such points.
He believes investors must also question boards - in particular, nominating committees - to find out why a certain director was appointed, if the board was aware of the number of directorships that person has and why it chose to appoint someone with multiple directorships: 'How it answers will determine how well it has thought the matter through and how comfortable it is with the appointment.'
Mr Gerald also believes all companies should disclose in their annual reports the number of directorships each of their directors holds: 'There should be greater transparency on this front, as it will help shareholders decide if a particular director can carry out his duties effectively.'
SIAS will in future take such matters into its consideration of companies, he said.
The debate on directorships was reignited recently when Singapore Exchange chairman JY Pillay said his personal view is that an individual should sit on the boards of not more than five large, diverse companies.
The debate has seen some come out strongly in favour of a qualitative guideline suggesting an upper limit to the number of directorships, but the Singapore Institute of Directors has held fast to its view that a limit is unnecessary as a director knows his or her own limitations.
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>SIAS: Need for caps on directorships
Four for those with full-time job, otherwise six: David Gerald
By MICHELLE QUAH
FOUR if you have a full-time job and six if you don't - these are the limits Securities Investors Association of Singapore (SIAS) chief David Gerald believes should be applied to the number of directorships an individual can hold.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Gerald: All companies should disclose in their annual reports the number of directorships each of their directors holds </TD></TR></TBODY></TABLE>He also believes investors here should take a cue from their counterparts abroad - and actively question directors on their commitments and abilities, and boards on their nomination processes.Joining the spirited debate over whether there should be a cap on the number of directorships, Mr Gerald told BT that Singapore needs a guideline restricting individual directorships to safeguard shareholders' interests.
'The responsibilities of a director have changed much over the years,' he said. 'Now, you have to sit on various committees - such as the audit committee, remuneration committee and nominating committee - and go through numerous reports. The responsibilities are heavy and you need to be extremely focused and dedicated to do the job well.
'While I understand that an individual himself can decide what he is capable of, and that a board decides who it wants to appoint, I still believe it's better to have a guideline suggesting the number of boards a person can sit on.
'I read a research report recently that says a person should hold no more than four directorships if they have a full-time job and no more than six directorships if they don't. I believe - given the work and dedication required - that this ought to be the limit.'
As the head of the investors watchdog group, Mr Gerald also believes minority shareholders have a key role to play: 'They have the right to question the director being appointed - they should question the person's background, the number of directorships they hold, their contribution to other boards, what they will bring to this board and their knowledge of the company and its business.
'In all my years championing shareholder activism, I've realised that investors here seldom ask these questions. And many feel there's little point asking because the majority vote will always prevail and the director will be appointed no matter what issues the minorities raise.
'Still, I believe the minorities need to keep asking - keep bringing up these issues and putting them on the table. This will raise consciousness and send a clear message to boards and majority shareholders that the minorities are aware of the issues and will question them.'
The SIAS chief said this is common practice in countries like Australia and New Zealand, where directors have to field questions from shareholders on such points.
He believes investors must also question boards - in particular, nominating committees - to find out why a certain director was appointed, if the board was aware of the number of directorships that person has and why it chose to appoint someone with multiple directorships: 'How it answers will determine how well it has thought the matter through and how comfortable it is with the appointment.'
Mr Gerald also believes all companies should disclose in their annual reports the number of directorships each of their directors holds: 'There should be greater transparency on this front, as it will help shareholders decide if a particular director can carry out his duties effectively.'
SIAS will in future take such matters into its consideration of companies, he said.
The debate on directorships was reignited recently when Singapore Exchange chairman JY Pillay said his personal view is that an individual should sit on the boards of not more than five large, diverse companies.
The debate has seen some come out strongly in favour of a qualitative guideline suggesting an upper limit to the number of directorships, but the Singapore Institute of Directors has held fast to its view that a limit is unnecessary as a director knows his or her own limitations.
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