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SINGAPORE: The chief executive of Temasek Holdings should ideally be a Singaporean. Finance Minister Tharman Shanmugaratnam made the comment in Parliament on Tuesday.
But the position is not an easy one - given the difficulties in finding a candidate with suitable experience who would be willing to work in a Singapore government-related organisation.
Temasek Holdings manages about US$150 billion worth of assets, many of which are seen as strategic to the Singapore economy.
And some analysts said that it is only normal for a sovereign wealth fund (SWF) to pick as its CEO someone from within its borders. In fact, the appointment of Charles Goodyear ran against the grain.
Arjuna Mahendran, head of Asian investment strategy at HSBC Private Bank in Singapore, said: "The concept of a SWF has necessarily attached to it the idea that it would be purely Singaporean or whatever nationality is associated with the fund. Therefore, appointing a foreigner was an exception.
"I'm not sure whether many sovereign wealth funds have foreigners running them in other countries. So I think Singapore was taking a fairly decisive exceptional route of appointing a foreigner - but for good reason, as the finance minister explained they wanted someone who had exposure to running global companies and working in a global context.
"Of course, there are many Singaporeans who now have worked for MNCs for several years, if not decades, and I think you will have a pool of such people emerging and that would make it easier to find people in the future."
This was an issue discussed at Cabinet level, Mr Tharman said. "The question of whether the CEO of Temasek should be a Singaporean is not a trivial one," he told Parliament.
"It is one which Cabinet considered very carefully and debated on before arriving at a decision. I would say that ideally we should have a Singaporean as a CEO."
"The ideal is not always possible. What is critical is that the board remains in the control of Singaporeans," added Mr Tharman. "Chairman has to be Singaporean. Deputy Chairman, Singaporean. Majority of the board, Singaporean."
"Let the board decide on who the best candidate is for CEO. The board knows our preferences, but it knows also that the government wants to ensure that Temasek gets the best person for the job each time it looks for potential CEO successor," the minister went on to say.
"We should not restrict their choices. To restrict their choices would also be sending a signal, not just to Singaporeans but more importantly to the countries in which Temasek invests in, that there is an element of political decision making in the way Temasek is run. We do not want to send this signal."
The minister said that the pool of CEO talent in both Singapore and overseas is small. And analysts said the list of criteria for a person to helm a company like Temasek is a long one. For example, Temasek will need a chief executive with a strong profile.
Ho Yew Kee, vice-dean of finance and administration at NUS Business School, said: "This person needs to have a profile which the market players, the government sector and various individuals (can) recognise and respect.
"Otherwise it's very hard for such an individual to be CEO of Temasek because he would not have enough credentials. And when he speaks, he may not be able to address politicians, significant bankers and investors, and in the international arena, he may be someone who is totally unknown too."
Strong credentials aside, one clear benefit to having a Singaporean is that he or she would be more attuned to the nuances of local culture.
Mr Ho said: "Such an individual would understand the dynamics of the government relationship with the corporate sector, especially for an organisation like Temasek Holdings. You understand the strategic importance, and the national interest which we have to guard."
- CNA/ir
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