Temasek Holdings' CEO Succession Plans

1 Mr Leon Perera asked the Minister for Finance if he can provide an update on the CEO succession process at Temasek Holdings.

The Senior Minister of State for Finance (Ms Indranee Rajah) (for the Minister for Finance): Mdm Speaker, Deputy Prime Minister Tharman Shanmugaratnam had explained in Parliament in 2009 that the Chief Executive Officer (CEO) succession planning at Temasek is a key responsibility of its Board of Directors.

The Temasek Board conducts annual leadership succession reviews as a matter of good governance. As reported annually since 2004 in the Temasek Review, the Temasek Board has a board committee which reviews and makes recommendations to the Temasek Board on management leadership development and succession planning for key positions. This includes Board as well as CEO succession plans.

For CEO succession, the Temasek Board reviews and tracks a list of candidates annually. These include those from within the company as well as those from outside Temasek, both in Singapore and abroad. This confidential list of candidates ranges from those who can step in immediately, to younger candidates who could be potential successors beyond the five-year period. The Temasek Board meets with potential successors regularly to get to know them and assess their suitability, including young potential candidates early in their careers, inside as well as outside of Temasek.

The timing and candidate for CEO succession are the purview of the Temasek Board. As Temasek is a Fifth-Schedule Company under the Singapore Constitution, the CEO's appointment is subject to the concurrence of the President.

Mdm Speaker: Mr Leon Pereira.

Mr Leon Perera (Non-Constituency Member): Madam, I thank the Senior Minister of State for her detailed answer. Just a few supplementary questions. Would the Senior Minister of State be in a position to share why the CEO succession was deemed necessary and timely in 2009 when one attempt was made but, subsequent to that, there has not been a succession event that has occurred? Is it in the view of the Board that it has become less necessary or is it because of the inability to find a suitable candidate?

Secondly, if it is in relation to finding a suitable candidate, with your permission, Mdm Speaker, may I quote very briefly from the Hansard?

Mdm Speaker: Very briefly, please.

Mr Leon Perera: The then Finance Minister referred to a longer-term pipeline of future CEO candidates within Temasek on 24 March 2009. He said, "The current candidates for future CEO succession within Temasek mostly in their late 30s or 40s include Singaporeans as well as foreigners." This was after Mr Goodyear had been announced already. So, there would appear to have been a longer-term pipeline of candidates then in 2009.

If the answer is the inability to find suitable candidates, I would like to ask why some of those candidates that had been identified then were not considered and have not been already put in place.

The third and last supplementary question is: does the Ministry recommend any retirement age for senior management positions for Temasek and the Government of Singapore Investment Corporation. I ask that because I know that some private equity companies do have strict retirement age policies.

Ms Indranee Rajah: Mdm Speaker, I thank the Member for his supplementary questions. The short answer is that all the questions that the Member has asked are really a matter for the Temasek Board. They would have to review as to when it is timely to have somebody come in, who those candidates ought to be. As I had explained in my earlier answer, they do this review regularly. As to when a new CEO may come in, that will really depend on the Board.

The important thing to understand is that Temasek operates as a commercial entity. So, this is not something where the Government interferes with that management. They approach it the same way any other corporation or commercial entity does, which is, you determine when you think is the best time or if there is a need to have a change of CEO or a succession. As and when the need arises, you will do what is necessary.