Board Monitor Singapore 2021

In an unprecedented year, a focus on prior CEO experience as well as gender diversity

Board fundamentals—financial oversight and good governance—were crucial in 2020 as companies navigated through an unprecedented global pandemic. Many directors found they were working more closely than ever with executive teams to keep companies afloat, were devoting more time to board work, and became more conscious about the topics on their agenda. During the onset of the pandemic, the prime focus for boards was organizational survival and cash preservation, along with ensuring stakeholders stayed engaged more frequently. Yet with all that, boards were also increasingly expected to address topics as wide-ranging as community responsibility, sustainability, and diversity in their own composition—and to do so publicly. In addition, the necessary remote working and crisis management forced boards to operate differently, with far more pace and tempo and often outside their traditional schedule and agenda. All this took a newfound agility.

Taken together, this affected how boards thought about the new members they added in 2020. In Singapore, the STI 30 companies added 35 new directors, a 50% increase from 2019 and more than the number added in 2018. (Hong Kong’s Hang Seng companies also saw a notable rise in the number of new directors, at 20%). Two-thirds of Singapore’s new board seats were filled by current or former CEOs, an increase from 2019 and a sharp rise from 2018. While Singapore’s boards were clearly seeking hands-on CEO experience to navigate through unprecedented times, they also made some marked strides in diversity, which can be a hard balance to strike. A third of the new seats were filled by women, up from a quarter in 2019. And 26% of seats were filled by people from outside Singapore. This increase in diversity in 2020, after a drop in 2019, underscores many Singaporean boards’ desire to seek new perspectives.

We increasingly see boards in Singapore add seats for directors who will bring a different perspective. In some cases, that may be gender or, in other cases, the perspective of a sitting executive rather than the more traditional and known Singaporean board pool.

Looking ahead

While the future remains uncertain. Last year compelled many boards to work closely with management to survive the storm and then to focus on recovery, taking a fresh look at their business model and how they could do things differently to deliver operational continuity while ensuring strategic goals are achieved over a longer horizon.

For companies where boards had started deliberations on future-proofing the business, the pandemic has accelerated the pace of those considerations. We see boards augmenting their existing appointment practices to broaden the lens on board profiles from nontraditional industry, functional, or regional experience to bring new perspectives around running the business effectively today while building for tomorrow. We expect Singapore’s boards to continue to focus on renewal and become increasingly strategic about building the right board that is fit for the future and prepared for the untimely and unknown. (For our perspective on board reviews, see “Building the foundation for better board refreshment.”)

Acknowledgment

Thanks to the following Heidrick & Struggles colleague for his contributions to this report: Hnn-Hui Hii.