CDL saga highlights complexities of governance, say experts

The ongoing saga between Singapore's billionaire property tycoon Kwek Leng Beng and his son Sherman has highlighted the complexities of corporate governance and directors' responsibilities, experts said.

- Angela Tan

Speaking at a board mentoring event organised by the Institute of Singapore Chartered Accountants on March 10, they stressed that the power associated with being a company director comes with significant responsibilities.

A director's duty is not just to attend meetings, but also to safeguard a company's future, said Ms Lim Joo Lee, chief financial officer and company secretary of the manager of Aims Apac Reit.

Mr Tan Chong Huat, senior partner at RHTLaw Asia, said a failure to uphold these duties can result in serious consequences.

"Being a director is fraught with danger. If you are not inquisitive and don't like to ask questions, then directorship is not for you," he said.

Aspiring directors should conduct their own due diligence before accepting a position on a board. "The first piece of advice I would offer is to ensure that due diligence has been properly followed by the nominating committee," Mr Tan said.

The boardroom tussle between Mr Kwek Leng Beng, executive chairman of City Developments Limited (CDL), and his son Sherman man, CDL's chief executive officer, centres on allegations of impropriety over the nomination process for directors.

Aspiring directors should research the company they are looking to join, especially when dealing with family-run operations or controlling shareholders, Mr Tan said.

They should review the board composition to see if there is a balance of independent and executive directors.