Good corporate governance vital

by Nick Sim, for The Straits Times, December 7, 2009.

I read with interest Goh Eng Yeow’s commentary, ‘Clarify role of independent director’ (Nov 30). The call to clarify the role of an independent director is timely. Independent directors are generally expected to bring fresh perspectives on the board’s direction, constructively challenge management, and chair and sit on key watchdog committees.

Whether they should be expected to advocate the interests of minority shareholders in conflicts is unclear. Indeed, Section 157 of the Companies Act, which provides for directors’ duties, does not charge them with this affirmative duty. Directors are generally expected to act in the company’s best interests, not just for the benefit of any particular group.

Nevertheless, few would disagree that independent directors should not turn a blind eye when there is flagrant oppression of minority shareholders. After all, minority shareholders’ interests are recognised and protected under various codes of corporate governance.

Independent directors, by virtue of their board membership and independence from management, are in a good position to ensure fairness and equality across the entire shareholder spectrum…(continue reading)

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