Mr S Iswaran at the CPA Forum 2010, 16 Apr 2010

SPEECH BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND EDUCATION AT THE CPA FORUM 2010 ON FRIDAY, 16 APRIL 2010, 0910 HRS AT THE SWISSOTEL THE STAMFORD

Chaly Mah, President of CPA Australia, Singapore

Low Weng Keong, Deputy President and Deputy Chair of the Board, CPA Australia

Introduction

I am pleased to join you here today for this forum.

The forum’s theme, “Building resilient businesses with good corporate governance”, is pertinent and timely.In the wake of the recent global recession, two key challenges that today’s business leaders face are firstly, to sustain business through tough economic conditions, and secondly, to foster and restore trust with stakeholders.

The importance of corporate governance

Implementing strong and effective corporate governance is crucial for businesses to successfully navigate and emerge from the current tough economic environment.The recent financial crisis has vividly demonstrated how the global financial system can very easily come to a complete halt when it loses the element of “trust”.

Similarly, ‘trust’ is an essential attribute in the business world. Increasingly, businesses are beginning to recognise that high standards of corporate governance and transparency enable businesses to foster trust with stakeholders. This in turn, is vital for the long term growth and sustainability of businesses.A good business proposition can be rendered moot without the element of trust.

Integrity and trust have long been the key cornerstones upon which Singapore has developed our marketplace over the years.Singapore has built a reputation as a trusted place for business where things can be expected to work as they should. It is also a place where the rule of law is enforced and where you can do business with minimum red-tape.While these are things that we may have grown accustomed to, and even take for granted, we should continue to strive for higher standards of corporate governance and transparency in our marketplace. This will enable us to keep pace with the evolving demands of the stakeholders.

Initiatives to further strengthen corporate governance

In this regard, several regulatory reforms are taking place in Singapore to further strengthen our corporate governance regime.The Companies Act is undergoing a major review. The review aims to enhance the fundamental corporate regulatory framework supporting Singapore’s growth as an international hub for both businesses and investors.Earlier this year, the Corporate Governance Council was established by the Monetary Authority of Singapore to promote high standards of corporate governance in companies listed in Singapore. This will help to maintain investors' confidence and enhance Singapore’s reputation as a leading and trusted international financial centre. A key priority for the Council this year will be a review of the Code of Corporate Governance. The Council will also identify opportunities for continuing professional development of directors and the development of practical guidance for Board committees of listed companies.

The private sector too has a key role to play.I would like to commend CPA Australia, the Corporate Governance and Financial Reporting Centre, the Business Times and the Investment Management Association for producing the governance and transparency index and for organising today’s forum. The index not only gives investors valuable information, but also serves to encourage listed companies to strive for the highest standards.

This push for companies to not merely comply with minimum requirements, but rather strive for the highest standards, is important. To maintain confidence and trust, effective implementation and practice is just as important as strong and high quality regulations. It requires a commitment to high standards and people with the right skills, attitude and support at all levels, so that the standards are applied in the best interests of the company and the shareholders.

Many companies are focused on growing their business but may not have paid sufficient attention to building up their governance framework in tandem. We must therefore work towards enabling companies to achieve this.

To accomplish this, the companies need professional help.The accountancy profession for example, has a very important role in promoting and upholding strong corporate governance standards in Singapore. As professional accountants, many of you here today are directly involved with challenges relating to governance, reporting and shareholder engagement.

The accountancy profession in Singapore enjoys a strong reputation and branding of integrity and trust. Our accounting professionals are much sought after by overseas companies to be chief financial officers.We have also developed an internationally reputable auditor oversight framework that is recognised as the best in the region.

To further grow and develop our accountancy sector, the government set up the Committee to Develop the Accountancy Sector (CDAS) last year. CDAS has just released its final report which charts its vision for Singapore to be a leading global accountancy hub by 2020. The strategic thrusts towards this vision include working to make Singapore a leading global centre for accountancy talent, professional development and services in the Asia-Pacific region.

These initiatives bode well for our local businesses which will need the support of the accounting profession to achieve the trust and sustainable growth that will attract investment, and help them become strong regional and even multinational players.

Conclusion

Finally, I would like to congratulate the companies that have come in at the top of the latest Governance and Transparency Index, for setting a high benchmark for others to emulate. I look forward to seeing even more companies make their way to top of the index in the near future.Thank you and I wish you an informative and productive session this morning.