Are directors in PLCs truly independent? Will a Chairman of a PLC, more so where the company is majority-owned by a person, appoint directors who are a pain in the neck? Yes-man director? Who will appoint a director, who is a pain in the neck? I wrote the following in this link: tankoktim.blog/2012/05/02/310/ quote: Independent directors b] Independent directors of Audit Committee, Risk Management Committee, etc. Are the directors truly independent? Do they meet without the top executives [Chairman, President, CEO, etc] present throughout the length of each and every of their meetings with them breathing down their necks at the committee’ meetings? Does SGX know what is going on at the PLCs’ level with regard to the true independence of directors? The Banking Act [including the Companies Act] should be amended to prohibit this practice [not to allow the executives to squat at each and every of the committees meetings affecting the independence of the directors in carrying out their duties effectively and independently, and not to be subjected to be under the watchful eyes of the top executives], and make it compulsory for disclosure of real independence of committee’s meetings in the Annual Reports of the PLCs. Fine those directors who contravene the law on this prohibition. If this amendment is not enacted, it will make a joke of the ‘independence’ of directors of Audit Committee, Risk Management Committee, etc. in the PLCs. unquote ========= What I wrote to MAS in April 2010. The full text below: To: [email protected] Cc: [email protected]; [email protected]; [email protected]; johngollifer@sgx; Sent: Mon, 19 April, 2010 18:37:30 Subject: Proposed amendments to the Banking Act 19 April 2010Dear Sirs,I hope the proposed amendments to the Banking Act will take into consideration the following issues: External and internal auditors a] How to prevent rogue executives in financial institutions [FIs] and public-listed companies [including their rogue auditors] from padding and trimming the figures to fool the public and the authorities? Enron, World and Arthur Andersen’s collapse should not be taken lightly and it should not be conveniently forgotten. The proposed amendments of the Banking Act [including the Companies Act] should have provisions to make it compulsory for the FIs to disclose the transactions of PLCs [including their off-book transactions] to their external and internal auditors by email with copy extended to the external and internal auditors of the FIs. Both groups of external and internal auditors [auditors of the FIs and the PLCs] should be required by the Companies’ Act to communicate among themselves by emails to confirm all the transactions exceeding $500 million each to complete every external audit signing-off. Independent directors b] Independent directors of Audit Committee, Risk Management Committee, etc. Are the directors truly independent? Do they meet without the top executives [Chairman, President, CEO, etc] present throughout the length of each and every of their meetings with them breathing down their necks at the committees’ meetings? Does SGX know what is going on at the PLCs’ level with regard to the true independence of directors? The Banking Act [including the Companies Act] should be amended to prohibit this practice [not to allow the executives to squat at each and every of the committees meetings affecting the independence of the directors in carrying out their duties effectively and independently, and not to be subjected to be under the watchful eyes of the top executives], and make it compulsory for disclosure of real independence of committee’s meetings in the Annual Reports of the PLCs. Fine those directors who contravene the law on this prohibition. If this amendment is not enacted, it will make a joke of the ‘independence’ of directors of Audit Committee, Risk Management Committee, etc. in the PLCs. Cash and Corruption c] Cash transactions of FIs and PLCs. Cash transactions are the root cause of corruption and money laundering in the world. The Banking Act [including the Companies Act] should be amended for the FIs and the PLCs to declare their total amount of cash transactions in their Annual Reports. This amendment will enhance Singapore’s image as a financial centre by taking the lead in requiring such disclosures. It will send a strong signal that Singapore will not condone the use of huge cash transactions by PLCs as it could lead to money laundering on its shores going easily undetected. ====== Sharing what I wrote on my blog: tankoktim.blog/category/external-and-internal-auditing/
Posted on: Mon, 24 Nov 2014 23:46:14 +0000