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Straits Times
27-06-2025
- Business
- Straits Times
3 things to note as an independent director in a family business
Mr Chew Sutat (left), chairman of consultancy Shan De Advisors, and Dr Marleen Dieleman from IMD Business School at a panel discussion held by the Singapore Institute of Directors. PHOTO: SINGAPORE INSTITUTE OF DIRECTORS SINGAPORE – More than half of the 600 companies listed on the Singapore Exchange (SGX) are family-run businesses. So how do independent directors sitting on the boards of such companies navigate the complexities it brings, especially when decisions can be made over the dining table and WhatsApp chats rather than the boardroom? The issues that can arise in family-run businesses were thrust into the spotlight when City Developments Limited (CDL) executive chairman Kwek Leng Beng sued his son Sherman Kwek, who is the property giant's group chief executive officer. The tussle between father and son for control of CDL came to light on Feb 26, and culminated in the older Mr Kwek dropping the lawsuit, but not before matters such as the appointment of independent directors came under public scrutiny. These issues were part of a panel discussion held by the Singapore Institute of Directors on June 25, titled 'When Board Members Disagree – Lessons from Recent Public Disputes' at the Park Royal Collection Marina Bay hotel. Panellists provided tips for the gathered directors, ranging from how to discharge their duties responsibly in the face of opposition and knowing when constructive disagreement becomes destructive. Tips for independent directors: 1. Be sensitive to what is happening within the family, outside the business. There is definitely some spillover between from what happens in the family into the business, said Dr Marleen Dieleman from IMD Business School. Many family businesses are several decades old and could have gone from a second generation of leaders to a third generation of them, which means there might be multiple stakeholders who may not agree on how to run things . 'As a director, we cannot just sit on the board and ignore that these dynamics are going on. Why? Because, if there is a conflict between family members, it will very easily go from constructive conflict to destructive conflict,' she said. 'Being in a family business is a little bit like Hotel California. You can check in, but never leave,' she said, adding that this makes the conflict even more intense. 2. Know who holds the decision-making power in the business. The No. 1 question to ask is: who is the most important person in this family that is making decisions, and then you will find sometimes that that person is not on the board, said Dr Dieleman. Directors also have to think of it not just as a single company, but as a group. 'Most of the companies that are listed here are part of a group. It's rarely ever one company, and that means you have to also map out the group,' she said. This means understanding the related transactions that are going on around the family firm, to see the strategic picture the family has in mind and how one company fits into the bigger whole. 'Look at the spread of the shareholding by family members in the family business – figure out where is the voting power among the family members, because it is not necessarily the person who is the key leader on the board representing the family,' she said. For instance, the ownership of CDL is widely dispersed among many different family members in holding companies . Even in the first generation, the older Mr Kwek had several brothers involved in the group, she added. 'When you deal with family-owned businesses, it's very important to look at the voting structure and to see who will actually have the power to vote one way or another, and when that vote is dispersed, it can be a very complicated story.' 3. The best interests of the company come first Even if it means they may get voted out of the board, the responsibility of independent directors is to always act in the company's best interests . Mr Chew Sutat, chairman of consultancy Shan De Advisors, said: 'When there are disagreements on the board, directors should... try to find a way to influence and get the outcome desired in the interest of the company.' Fellow panellist Rachel Eng, managing director of law firm Eng and Co, said directors also need to choose their battles, especially if they find they are pressured by others on the board to go in a certain direction. She said that arguments can get emotional, and directors can feel that those who do not vote for their views are personally against them. There are also often many decisions to be made, and directors need to differentiate between decisions which are strategic and operational as opposed to those which are problematic or illegal, she said. 'So, first choose your battle. If it is really unlawful, illegal, you have to put your foot down, and immediately you have to step down.' Eng and Co managing director Rachel Eng and NUS Centre for Governance and Sustainability director Lawrence Loh on the panel organised by the Singapore Institute of Directors. PHOTO: SINGAPORE INSTITUTE OF DIRECTORS Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore, said that as a last resort, if board directors cannot have their dissenting vote on record, they can even consider becoming internal whistle-blowers. Ultimately, Mr Chew said directors all have experiences of feeling compelled or pressured to do something that others may feel strongly about. 'We struggle with it. It's a practical reality,' he said. But all one has to do, he added, is ask: 'Am I doing the right thing for the company?' Sue-Ann Tan is a business correspondent at The Straits Times covering capital markets and sustainable finance. Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
10-06-2025
- Business
- Business Times
Community Chest has had to evolve to meet society's increasingly complex needs: Chew Sutat
[SINGAPORE] More companies, family offices and individuals now have clear ideas about the causes they want to support, so the business of giving has become democratised, said Community Chest chairman Chew Sutat. But this 'democratising' may not lead to the best outcomes for all the causes out there that need help, added the 52-year-old, who formerly held senior executive roles at the Singapore Exchange. This is because donors also have their own views on which causes or agencies to support and why, and how to go about giving that aid. To meet such changes and society's increasingly complex needs, Community Chest has had to evolve, he said. The organisation was set up in 1983 as a centralised fundraising body for Singapore's social service agencies, and is the philanthropic and engagement arm of the National Council of Social Service (NCSS). Chew drew a contrast between the situation in the Republic and the far-larger philanthropic market in the US, where 'anybody who has a lot of wealth can set up a foundation'. There, the wealthy philanthropists are the ones who influence the direction society takes in terms of which causes to support. Inevitably, funding gaps arise because of the lack of centralised information and government organisation. Over here, the Community Chest on its own cannot support all needs, Chew said. What it can do, however, is 'provide and channel the resources to where the greater needs are because we have the data… We can provide the resources to build the capabilities of organisations'. A NEWSLETTER FOR YOU Friday, 2 pm Lifestyle Our picks of the latest dining, travel and leisure options to treat yourself. Sign Up Sign Up And companies have gone beyond holding charity events and writing cheques to their chosen causes – they now want to give back in more sustainable ways. 'Therefore, we are transitioning our own model at Community Chest, from just fundraising to adopting a long-term resourcing approach for the sector,' Chew said. More complex innovation, change and transformative solutions are needed in philanthropy now, he added. Programmes such as the 4ST Partnership Fund have sprung up, pooling resources from various sources to enable contributions to larger projects. For Chew, collaboration between the public, private and people sectors is key. This is so the Community Chest can complement the NCSS as a developer of the social service sector. He added that the various organisations in the social services ecosystem work together under the Sustainable Philanthropy Framework, which was launched in 2024 to help companies measure, monitor and benchmark their efforts in three areas: giving, volunteering, and socially responsible business practices. Chew Sutat, chairman of Community Chest, says: 'If we ever go down that path where we depend on the government for everything, we must expect taxes to go up. That would affect us as a society in terms of having a sustainable, healthy economy in the long term.' PHOTO: COMMUNITY CHEST NCSS developed the framework in partnership with the National Volunteer and Philanthropy Centre, the Singapore Centre for Social Enterprise, the Ministry of Social and Family Development, and the SG Cares Office. Chew said there is no need to worry about an overlap between these agencies because 'it is really whole-of-government'. 'This framework creates not just a common language, but also a platform to channel corporate resources to create this innovative transformation mentioned earlier,' he added. 'Doing good is good business' Community Chest's annual report shows companies how their donations were used and the impact they made. Chew urged organisations to consider institutionalising the practice of giving back to society, as 'you cannot be certain about the business cycle – whether you are going to be profitable or not – and you do not want to have an argument about the CSR (corporate social responsibility) budget every year'. Although many social service programmes are funded mainly by the government, budgets are still limited, so people, private and public collaborations remain important, he added. 'If we ever go down that path where we depend on the government for everything, we must expect taxes to go up,' he said. 'That would affect us as a society in terms of having a sustainable, healthy economy in the long term.' He cited how the private sector does its part for those with special needs. For such children, schools can provide them with support for the 10 to 12 years they are in education – but their paths often become uncertain once they become adults. Companies such as UOB have stepped up and changed their work arrangements to enable the hiring of these individuals. By working with such partners, Community Chest has moved beyond fundraising to developing transformative programmes that require innovation and multiyear experimentation. Chew said: 'The Sustainable Philanthropy Framework is therefore essential in that we have a corporate language and platform to guide those who are already established in giving, and bring in new partners who say: 'I do not have the resources of the top 10 STI (Straits Times Index) companies, but I can help in areas such as talent and digitalisation.'' Ultimately, it is about 'working collectively and collaboratively to make this society a better space, and doing good is good business', he said.
Business Times
10-06-2025
- Business
- Business Times
Chew Sutat on Community Chest evolving with the business of giving back
[SINGAPORE] More companies, family offices and individuals now have clear ideas about the causes they want to support, so the business of giving has become democratised, said Community Chest chairman Chew Sutat. But this 'democratising' may not lead to the best outcomes for all the causes out there that need help, added the 52-year-old, who formerly held senior executive roles at the Singapore Exchange. This is because donors also have their own views on which causes or agencies to support and why, and how to go about giving that aid. To meet such changes and society's increasingly complex needs, Community Chest has had to evolve, he said. The organisation was set up in 1983 as a centralised fundraising body for Singapore's social service agencies, and is the philanthropic and engagement arm of the National Council of Social Service (NCSS). Chew drew a contrast between the situation in the Republic and the far-larger philanthropic market in the US, where 'anybody who has a lot of wealth can set up a foundation'. There, the wealthy philanthropists are the ones who influence the direction society takes in terms of which causes to support. Inevitably, funding gaps arise because of the lack of centralised information and government organisation. Over here, the Community Chest on its own cannot support all needs, Chew said. What it can do, however, is 'provide and channel the resources to where the greater needs are because we have the data… We can provide the resources to build the capabilities of organisations'. A NEWSLETTER FOR YOU Friday, 2 pm Lifestyle Our picks of the latest dining, travel and leisure options to treat yourself. Sign Up Sign Up And companies have gone beyond holding charity events and writing cheques to their chosen causes – they now want to give back in more sustainable ways. 'Therefore, we are transitioning our own model at Community Chest, from just fundraising to adopting a long-term resourcing approach for the sector,' Chew said. More complex innovation, change and transformative solutions are needed in philanthropy now, he added. Programmes such as the 4ST Partnership Fund have sprung up, pooling resources from various sources to enable contributions to larger projects. For Chew, collaboration between the public, private and people sectors is key. This is so the Community Chest can complement the NCSS as a developer of the social service sector. He added that the various organisations in the social services ecosystem work together under the Sustainable Philanthropy Framework, which was launched in 2024 to help companies measure, monitor and benchmark their efforts in three areas: giving, volunteering, and socially responsible business practices. Chew Sutat, chairman of Community Chest, says: 'If we ever go down that path where we depend on the government for everything, we must expect taxes to go up. That would affect us as a society in terms of having a sustainable, healthy economy in the long term.' PHOTO: COMMUNITY CHEST NCSS developed the framework in partnership with the National Volunteer and Philanthropy Centre, the Singapore Centre for Social Enterprise, the Ministry of Social and Family Development, and the SG Cares Office. Chew said there is no need to worry about an overlap between these agencies because 'it is really whole-of-government'. 'This framework creates not just a common language, but also a platform to channel corporate resources to create this innovative transformation mentioned earlier,' he added. 'Doing good is good business' Community Chest's annual report shows companies how their donations were used and the impact they made. Chew urged organisations to consider institutionalising the practice of giving back to society, as 'you cannot be certain about the business cycle – whether you are going to be profitable or not – and you do not want to have an argument about the CSR (corporate social responsibility) budget every year'. Although many social service programmes are funded mainly by the government, budgets are still limited, so people, private and public collaborations remain important, he added. 'If we ever go down that path where we depend on the government for everything, we must expect taxes to go up,' he said. 'That would affect us as a society in terms of having a sustainable, healthy economy in the long term.' He cited how the private sector does its part for those with special needs. For such children, schools can provide them with support for the 10 to 12 years they are in education – but their paths often become uncertain once they become adults. Companies such as UOB have stepped up and changed their work arrangements to enable the hiring of these individuals. By working with such partners, Community Chest has moved beyond fundraising to developing transformative programmes that require innovation and multiyear experimentation. Chew said: 'The Sustainable Philanthropy Framework is therefore essential in that we have a corporate language and platform to guide those who are already established in giving, and bring in new partners who say: 'I do not have the resources of the top 10 STI (Straits Times Index) companies, but I can help in areas such as talent and digitalisation.'' Ultimately, it is about 'working collectively and collaboratively to make this society a better space, and doing good is good business', he said.
