Ho Ching reaffirms Temasek as active, long-term shareholder

Ho Ching addresses VIPs and guests at the ABLA dinner.

Ho Ching reaffirms Temasek as active, long-term shareholder

28/10/14

By David Cowell

Ho Ching reaffirmed Temasek’s mission as an active investor and long term shareholder when she received the prestigious Asia House Asian Business Leaders Award.

The Executive Director and Chief Executive of Singapore’s S$223-billion (US$177 billion) sovereign wealth fund said Temasek, celebrating its 40th anniversary this year, was driven by two key watchwords – meritocracy and integrity.

We invest in businesses which operate and compete effectively for the long term, and not take short cuts at the expense of the community at large,” Ms Ho told an audience of senior business leaders, political figures and diplomats at London’s Banqueting House.

VIPs and guests at the ABLA dinner at London's Banqueting House

VIPs and guests at the ABLA dinner at London’s Banqueting House

“These ideas and ideals influenced our thinking from the earliest days about our roles and responsibilities for the long term.”

She said Temasek decided 10 years ago to foster an owner’s mindset within its own operations and introduced deferred compensation plans, linked to risk adjusted returns. For senior executives, a substantial part of bonuses and incentives are deferred for as long as 12 years, or about two business cycles.

“If the returns are not sustained, we share negative bonuses – in other words, bonus claw backs. In so doing, we try to align interests and behaviour towards long term ownership.

“We engage with our portfolio companies and other stakeholders around the world, with a view to fostering good governance.

“These are unusual disciplines to which we subject ourselves in order to build an institution for the long term.”

Ms Ho said underlying these initiatives is “the idea that we work for a better tomorrow, as a responsible and trusted steward.”

“Businesses do not exist in isolation from society or their communities, nor the forces that shape us,” she said.

 

Singapore Airlines is 56 percent owned by Temasek. Photo courtesy of Singapore Airlines

Singapore Airlines is 56 percent owned by Temasek. Photo courtesy of Singapore Airlines

To support this idea, Temasek decided 10 years ago to set aside a portion of its returns to uplift the community at large, particularly in developing Asia.

Ms Ho said Temasek had to date established and sponsored 16 community endowments, each with specific mandates to build people, build capabilities, build bridges between communities and rebuild lives.

The funding helps projects ranging from research into mental health or Parkinson’s
disease to developing pilot programmes to support ageing-in-place. It also helps caregivers, single parents and traumatised children as well as programmes for disaster recovery and rebuilding lives.

Temasek, at forty this year, is part of the Singapore story. Our journey
has just begun. We will, yet again, embark on a new journey of change
and challenge, but also of hope and opportunities,” she said.

She told bankers, Asian diplomats and politicians at a lavish Award dinner in London’s Banqueting House on Monday 27 October: “As we face an uncertain world of change, and the exciting challenge of the Digital Age, I do hope that Singapore and Temasek will have the honour and privilege to work with many of you here, to make a difference – to bring about a better and kinder world, a more sustainable and thoughtful world, and above all, a more peaceful, compassionate and inclusive world.”

For a full text of Ho Ching’s speech, click here.

To see a video of the Asian Business Leaders Award 2014 Dinner click below:-

David Cowell is a freelance journalist working for Asia House.

Ho Ching also spoke about how North America and Europe were markets of increasing interest to Temasek in a separate rare interview with Asia House. To read the interview in which she spoke about Temasek’s future goals and aspirations click here.

To find out more about the Asia House Asian Business Leaders Award and who the previous recipients were click here.