CODE OF CORPORATE GOVERNANCE - A thing (or two) to learn for our gahmen?

[brandon66]

For your knowledge. Looking through the code, it saddens me that the organisation of the gahmen is not even up to standard of these principles for running companies :(


CODE OF CORPORATE GOVERNANCE - 2 MAY 2012

THE BOARD'S CONDUCT OF AFFAIRS
Principle:
1 Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the long-term success of the company. The Board works with Management to achieve this objective and Management remains accountable to the Board.

BOARD COMPOSITION AND GUIDANCE
Principle:
2 There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management and 10% shareholders. No individual or small group of individuals should be allowed to dominate the Board's decision making.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Principle:
3 There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company's business. No one individual should represent a considerable concentration of power.

BOARD MEMBERSHIP
Principle:
4 There should be a formal and transparent process for the appointment and re-appointment of directors to the Board.

BOARD PERFORMANCE
Principle:
5 There should be a formal annual assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each director to the effectiveness of the Board.

ACCESS TO INFORMATION
Principle:
6 In order to fulfil their responsibilities, directors should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities.

PROCEDURES FOR DEVELOPING REMUNERATION POLICIES
Principle:
7 There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

LEVEL AND MIX OF REMUNERATION
Principle:
8 The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the directors to provide good stewardship of the company, and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose.

DISCLOSURE ON REMUNERATION
Principle:
9 Every company should provide clear disclosure of its remuneration policies, level and mix of remuneration, and the procedure for setting remuneration, in the company's Annual Report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key management personnel, and performance.

ACCOUNTABILITY
Principle:
10 The Board should present a balanced and understandable assessment of the company's performance, position and prospects.

RISK MANAGEMENT AND INTERNAL CONTROLS
Principle:
11 The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard shareholders' interests and the company's assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives.

AUDIT COMMITTEE
Principle:
12 The Board should establish an Audit Committee ("AC") with written terms of reference which clearly set out its authority and duties.

INTERNAL AUDIT
Principle:
13 The company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits.

SHAREHOLDER RIGHTS
Principle:
14 Companies should treat all shareholders fairly and equitably, and should recognise, protect and facilitate the exercise of shareholders' rights, and continually review and update such governance arrangements.

COMMUNICATION WITH SHAREHOLDERS
Principle:
15 Companies should actively engage their shareholders and put in place an investor relations policy to promote regular, effective and fair communication with shareholders.

CONDUCT OF SHAREHOLDER MEETINGS
Principle:
16 Companies should encourage greater shareholder participation at general meetings of shareholders, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

 

[batman1]

There is an exemption clause at the footnote or postscript:Temasek Holdings and
GIC and MIW are exempted from external audit of accounts by independent
external auditors.

 

[virus]

tat's why co-drivers are important to slap and wake up the drivers. auditors r crap. just look at the window dressing of town council reports after multi million losses. just covered up by a few vague sentence and pass through as if it is just a toilet visit to the nearest bushes.

.

 

[Bigfuck]

How Temasek Holdings obscenely overpays its staff : by Chris Balding...
e Average $52 million Temasek Employee
Posted on October 3, 2012
More than most professions, the pay of financial service professionals is or should be tied to their performance. It is easy to quantify the returns the investments they recommend return and easy to compare their performance to other financial service professionals. When executives perform well they frequently receive large bonuses. However, should they receive large bonuses when they fail to meet their own internal targets and consistently underperform the market over many years?

Over the past few years Temasek Holdings senior management has awarded itself bonuses for consistently underperforming the market and even failing to meet its own internal hurdle rates.

A hurdle rate is the rate of return an investment manager must exceed before collecting a bonus. Temasek states on its website that its risk adjusted hurdle rate ranges from 8-9% over the last few years. They further state in the Temasek Review 2012 that:

“When we deliver returns above our risk-adjusted hurdle, we have a positive bonus pool to distribute, part of which is deferred to future years. When we deliver returns below our risk-adjusted hurdle, we share a negative bonus pool….the average risk-adjusted hurdle rates for Temasek were about 9% through the years.”

So now that we understand what the Temasek hurdle rate is and why it is important, let’s look at how often they have met the hurdle rate over the past few years. Here is the total shareholder return as calculated by Temasek:



According to Temasek’s own numbers, since 2008 they have only beaten their own one year hurdle rate 1 out of the past 5 years. Their 5 year total shareholder return is a paltry 3% while their hurdle rate is 9%. This is not a good record. Finally, the one year that Temasek beat its hurdle rate of through March 31, 2010 with a return of 43% the first full year after the financial crisis, the Strait Times Index returned 55%. Not only is Temasek not beating its own hurdle rate, when it does beat its hurdle rate it isn’t beating the market.

Surely given this record of performance failing to meet its own internally established hurdle rates, Temasek should not be awarding senior managers bonuses especially given their statement above on how the creation of the bonus pool. According to the Temasek annual report since 2006 every year included cash bonuses for the prior years work; bonuses in six of seven years for “wealth added” even though “wealth added” was negative in 4 of the 7 years according to Temasek; co-investment investment units awarded in 5 years out of 7 comprising a major portion of compensation which appear behave similar to a stock option.

In other words, senior management is given an ownership stake in Temasek Holdings for failing to meet their own hurdle rate, follow their own policy, and not beating the market the one year they do beat their hurdle rate! The average Singaporean though gets 2.5% through their CPF account to fund Temasek. Who is getting the better deal?

To try and get an idea of how big a bonus Temasek senior management is awarding itself for not beating its own internal hurdle rate, let’s compare the Temasek management costs to that of other investors that disclose their costs. Temasek lists its operating expenses in its group income statements. To make a fair comparison, I add up their Selling & Distribution, Administrative, and Other Operating Expenses but exclude their Finance costs. You can see a simple comparison to other well known investment firms in USD below in Table 1.



Even though Goldman Sachs manages $762 billion USD more than Temasek while employing 31,900 more people its non-financial operating costs are only 34% higher. To put this in perspective, the average operating cost of employing someone at Goldman Sachs is $864,181 SGD. The average operating cost of employing those 400 employees at Temasek: $52,141,276 per employee! It is 60 times more expensive to employ someone at Temasek Holdings than Goldman Sachs and 94 times more expensive than Morgan Stanley.

The enormous discrepancy in operating costs between Temasek and firms like Goldman Sachs matters for two very important reasons. First, as financial firms primary non-financial cost is operational and administrative costs like employee compensation, office space, and overhead, this implies that Temasek is paying its employees well above industry norms. According to the Wall Street Journal, the average salary at Goldman Sachs was $367,057 in 2011. Unless Temasek is buying enormous amounts of printer cartridges and paper clips, these operational costs represent compensation costs.

Second, the excessive non-financial operating costs at Temasek represent an enormous drain on Singaporean public finances. Temasek currently pays $21 billion SGD in non-financial operational costs. If Temasek operational costs per employee were equal to Goldman Sachs, they would only spend $345 million SGD. In other words, if Temasek spent money like Goldman Sachs rather than Temasek, total operational costs would fall by 98.3%!! To put it another way, the difference between the amount of money Temasek would spend if it averaged Goldman Sachs cost per employee is equal to 34% of Singaporean government expenditure. The excessive spending is directly taking money out of the Singaporean budget.

Maybe the discrepancies and costs at Temasek should become part of the National Conversation?


<Courtesy from a banned moniker in another Leegime controlled forum>

 

[Ritchie]

Their senior management are rewarded with higher monthly income and need not enjoy too much bonus. Part of the part of which deferred to future years should be generously donated for good cause. And this deferred to the future years ought not to accrued the reserved of Temasek too large as economy is based on circulation of wealth into / within the market. Non financial operating costs means that the wealth is distributed to benefit the employees and societies at the end