Screwed: Sime Darby's Ahmad Zubir Murshid.
Is there really a dearth of talent in Singapore? Or are there other reasons?
Some years back, I did a count. Here’s what I found at that time:
QAF group managing director Tan Kong King was a director in 117 companies.
City Developments’ managing director Kwek Leng Joo held a total of 114 directorships.
Provision Suppliers Corp’s Chan Yeuk Wai sat on 105 boards.
A full-time executive with three or more board seats faces time constraints which may render his service ineffective, says Salomon Smith Barney.
In a research report entitled Best Practices in Corporate Governance: What Two Decades of Research Reveals it said most studies on US corporations defined directors as busy if they serve on more than three boards when holding full-time employment or if they sit on more than six boards when they are retired.
“Of course, practical constraints on time dictate that there is a limit to how many boards on which any individual can effectively serve, and studies have found that full-time executives with three or more board seats might be time-constrained,” SSB said.
Studies found that the presence of such directors on the board correlates with excessive CEO compensation and imply that busy directors do not contribute as much to effective corporate governance.
“When companies announce the appointment of an outside director that is a full-time executive at another firm and holds three or more other board seats, the market reaction tends to be negative,” it said.