Boon Heng to be new Temasek chairman

Dhanabalan to retire at end July after 17 years at helm of investment firm

By Lee Su Shyan, The Straits Times, 23 Jul 2013

TEMASEK Holdings chairman S. Dhanabalan is retiring after 17 years at the helm of the investment firm and handing the reins to former Cabinet minister and labour union chief Lim Boon Heng.

Mr Lim will take over on Aug 1, in a move signalling a new chapter for Temasek after what has been a remarkable era of transformation.

Mr Dhanabalan's 17 years have included some tumultuous times for stock markets, including the terror attacks in September 2001, and the global financial crisis.

But Mr Dhanabalan, 75, will retire at a high point, with Temasek's portfolio valued at a record $215 billion as at March 31.

Prime Minister Lee Hsien Loong thanked him warmly for his years of dedicated service in a personal letter yesterday.

He described Mr Dhanabalan as an exemplary chairman who provided strong leadership that helped Temasek distinguish itself as an active investor, a forward-looking institution and a trusted steward.

Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said that Temasek has delivered good, long-term returns and praised Mr Dhanabalan's "intellect, humility and deep sense of integrity", while Temasek chief executive Ho Ching paid tribute to his "strong moral compass and wise counsel".

Mr Dhanabalan, who will serve as honorary adviser, told a briefing yesterday how he felt "satisfaction" in helping to transform Temasek into an internationally respected Singapore institution.

Post 2000, Temasek expanded into Asian growth markets, making its portfolio more diversified and resilient.

Another area was better governance and transparency. A Temasek charter laid out guiding principles for the firm and it began publishing the annual Temasek Review. The firm also issued bonds.

These moves improved Temasek's position as a professionally managed investment firm.

Mr Dhanabalan also made it clearer, that the responsibility of looking after the interests of the Temasek portfolio companies and their shareholders lay with their boards.

Yesterday, he warned of challenges ahead in an increasingly volatile world. "The challenge will be to establish over the next five, eight, 10 years in spite of the ups and downs, a steady trend of increase," he said.

On fluctuations in the investment portfolio, he said: "We cannot be affected in our job by what the market perception is. We have to focus on producing results."

Mr Dhanabalan highlighted his successor's ability and experience in the public and private sectors. Mr Lim's "strong connection with people on the ground.... his people orientation will be a great help in his new role", he added.

Mr Tharman said Mr Lim, 65, has a strong track record of leadership in various roles and is well- placed to lead Temasek in its next phase of development in a challenging global environment.

With the new chairman's appointment out of the way, the issue of CEO succession is bound to crop up again. This has been a perennial topic since one-time successor Charles Goodyear abruptly resigned in 2009.

Mr Dhanabalan, noting that one of his most important decisions as chairman was to bring Ms Ho into the management team in 2002, would only say: "The board is constantly looking at succession. At some point, the CEO will be succeeded; over the next three, five years, there will be changes."

Steadfast leader in the face of challenges
Retiring Temasek chairman driven by sense of purpose in 17-year career
By Robin Chan, The Straits Times, 23 Jul 2013

TEMASEK Holdings chairman S. Dhanabalan has had plenty of difficult decisions to make over his 17-year tenure but one of the most controversial came on May 20, 2002.

That was the day it was announced that Ms Ho Ching, the wife of then Deputy Prime Minister Lee Hsien Loong, would become the investment firm's next head.

A decade later, he still stands steadfastly by that decision.

As he spoke to the media yesterday to announce his retirement from Temasek at the end of the month, he began by stating that the appointment was "one of the most important decisions" he took as chairman.

While he had no clear idea as to what Temasek should be when he decided to bring her in, he knew that the company had to change, he said. And in Ms Ho, he found someone who had "the creative ideas, the courage to take the ball and run with it without specific directions". That decision has played a pivotal role in his time at Temasek, said colleagues and observers yesterday.

It gave Mr Dhanabalan a trusted and entrepreneurial chief executive who helped transform Temasek from a civil servant-run investment company focused on Singapore, to a truly international, professionally run and globally respected investor today.

Under his stewardship, the investment company's portfolio value tripled from $70 billion in 1997 to a record $215 billion as of March 31.

Having the right management team enabled the firm to diversify its investments to emerging Asia and beyond, improve its transparency for the investment community and the public by issuing an annual report on its financial performance, and build up its corporate governance model.

The decision to appoint Ms Ho also exemplified Mr Dhanabalan's toughness of mind, independent streak and strong sense of purpose.

A former colleague, who declined to be named, said: "He has given a huge amount of support to Ho Ching, who has been the driving force behind Temasek's strength. To achieve that, she really needed someone like Dhana to make that decision."

Mr Dhanabalan admits that, as in any investment house, Temasek has had successes and failures during his time, but said he was happy overall. When asked yesterday about the naysayers of Temasek throughout his tenure, he repeated his mantra: "Let the results speak for themselves... We cannot be affected in our job by what the market perception is."

Beyond his strong-mindedness and intellect, Mr Dhanabalan, a former Cabinet minister and chairman of DBS Bank and Singapore Airlines, led with a deep sense of morality and humility.

He once observed in private that everyone sits on the same type of chair at Temasek - a testament to the openness of culture that he instilled at the organisation.

He noted at the briefing yesterday: "I don't necessarily have to work through the CEO, I can contact anyone. I have lunches with senior staff, one on one, so I know what's happening."

United Overseas Bank chairman Hsieh Fu Hua, who was a Temasek director from 2010 until last year, described him as "a man who is, in the world of business and finance, a humane person".

"It is not about himself, for sure," he added.

Mr Dhanabalan revealed yesterday that he had ideally wanted to retire at 70. But just as he was called back from retirement from politics in 1992, after then Deputy Prime Minister Lee was diagnosed with cancer, he answered the pleas to stay on at Temasek until a suitable successor could be found.

Reflecting on finally retiring, one month before his 76th birthday, he expressed his emotions in his typical rational manner: "If I go away feeling completely happy, then there's something wrong. If I go away feeling tearfully sad, there's also something wrong."

A devout Christian, Mr Dhanabalan said he will now commit more time to his church, the Bukit Panjang Gospel Chapel, where he preaches occasionally.

He may even write a book for his two children, he said, joking that he will not be playing golf because he is poor at the game.

What is clear is that he will be busy with something that gives him the same sense of purpose that has accompanied him throughout his career.

He said: "I want to do things that, in my personal value system, are most significant.

"And being successful in the corporate world is not, in my value system, the most significant in life. So I don't want to, finally, when I have the time to do it, (find that) I'm too blind to see, too deaf to hear, too weak to move."

AN EXEMPLARY CHAIRMAN, MENTOR AND FRIEND

"You have been an exemplary chairman.

You instilled a forward-looking culture in Temasek, which has stood it in good stead in a rapidly changing world. Temasek has reviewed its charter to stay abreast of the evolving landscape, while upholding the core principles of its success: emphasising long-term, sustainable investments over short-term bets, developing talent, and imbuing in your officers a commitment to Singapore.

"On a personal note, I would like to thank you for your signal contributions to Singapore. For half a century, you have served with distinction in the public service, political office and now Temasek. Throughout your career, you upheld the highest standards of integrity and probity, and demonstrated commitment, thoughtfulness and resilience. You are an exemplar to your successors, and an inspiration to all Singaporeans."

- Prime Minister Lee Hsien Loong, in a personal note to Mr Dhanabalan

"Dhana has been an inspirational leader and mentor to me and the rest of us in Temasek, as well as many in the various Temasek portfolio companies where he has either previously held leadership positions or offered his guidance as friend and mentor over many decades.

"Without Dhana's clear leadership and support for many of the ground-breaking initiatives, Temasek would not be what it is today. I wish him a well-earned retirement, after having served Singapore selflessly in so many ways over many years.

"At the same time, I take this opportunity, on behalf of the board and of our Temasek staff, to welcome Boon Heng as our fourth chairman. Boon Heng shares many common traits with Dhana, including a strong moral compass and a deep dedication to public service and public good. I am sure he will add to the tapestry of Temasek as we strive towards 2020 and beyond."

- Ms Ho Ching, Temasek executive director and CEO

"Under Mr Dhanabalan's leadership over the past two decades, Temasek has seen significant transformation. It has developed in its role as an active, value-oriented investor, and has delivered good, long-term returns.

"Having known and worked with Mr Dhanabalan for more than 20 years, I know his intellect, humility and deep sense of integrity will leave a permanent legacy at Temasek.

"I am confident that Mr Lim, who has had a strong track record of leadership in varied roles, will capably succeed Mr Dhanabalan in leading Temasek as it charts the course for its next phase of development in an evolving and challenging global environment."

- Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam

Temasek is a key Singapore institution, and an Asia-focused investment house. It has a portfolio of strong companies and a remarkable team of global talent. The energy and the drive of the management and staff are very impressive. I am very honoured to have this opportunity to work with the board and management to take the company forward.

- Mr Lim Boon Heng

Lim Boon Heng 'an adaptable, fast learner'
By Robin Chan, The Straits Times, 23 Jul 2013

FORMER labour chief Lim Boon Heng may not have a background in finance but his private and public sector experience and the willingness to build a rapport with people make him an ideal chairman of Temasek Holdings.

That was the ringing endorsement made yesterday by outgoing chairman S. Dhanabalan, who added that Mr Lim's ability to adapt and learn quickly will stand him in good stead.

"He was in NOL (Neptune Orient Lines) before politics, plunged into the union movement, which he knew nothing about, and he was a success wherever he was," added Mr Dhanabalan, who retires on Aug 1.

"So adaptability, ability to learn, rapport with people under which you work, the way you see yourself as a general, leading the charge as part of the team working on strategies; I think he has all that in my view that is required to be a good chairman of Temasek."

Mr Dhanabalan, who brought Mr Lim onto the Temasek board last June, said that he was picked from "quite a long list of candidates" that even included foreigners. The decision was made unanimously by the board.

He also shot down suggestions that a new chairman signalled a change in direction, saying "no one person determines the shift".

"The chairman together with the board and management determine which direction to take. It is not determined by the whims of one person at the top," he said.

Observers agree that it is unlikely there will be major changes.

Singapore Management University associate professor of finance Annie Koh said the appointment of a new chairman now will "provide a long-term runway for Temasek" and also ensures there is sufficient time for the chairman to settle in before more succession changes are made.

CIMB economist Song Seng Wun said that Mr Lim will be joining a team that is already "very well-versed" in investing.

"Temasek is growing overseas, with offices in the United States and Europe, so it's about him holding the team together. His people skills from NTUC will be where his main strength lies, gelling the whole team together," he said.

Former NTUC president John de Payva pointed out that Mr Lim has experience in the business world, having sat on the board of Singapore Airlines, and led NTUC and its recent restructuring of its co-operatives.

Mr Lim, 65, started his career at shipping firm NOL as a naval architect before rising to be manager of corporate planning and liner services. He entered politics in 1980 and over the next 30 years served as labour chief and minister in the Prime Minister's Office, before he retired in 2011.

Mr Liang Eng Hwa, MP for Holland-Bukit Timah GRC and the deputy chairman of the Finance, Trade and Industry Government Parliamentary Committee, said of Mr Lim yesterday: "His wide ranging experience in business, government and the labour movement as well as his steady temperament will be of great value to Temasek."

Growing Temasek into a distinct and unique enterprise
Temasek Holdings announced on Monday that former minister Lim Boon Heng will take over as chairman on Aug 1 from Mr S. Dhanabalan, who is retiring after 17 years. Below are edited excerpts of a question and answer session between Mr Dhanabalan and reporters at the press conference.
The Straits Times, 24 Jul 2013

Mr Dhanabalan, what is your greatest satisfaction? What would you do differently if you had the opportunity?

When we started Temasek in 1974, basically we had just a few companies in which the Government had invested. And the idea at that time was that the Government should not be involved in management of businesses. The Government and the civil servants should focus on policy.

For many years, Temasek continued in that mode, looking after companies, making some small investments, but basically looking after companies that we have. It was only from 2002 onwards that Temasek began to really seek to invest outside Singapore.

First of all, we decided that we would focus on emerging Asia, because we could see rapid growth in Asia, China, India, Indonesia, Thailand and Vietnam. And then, we began to look farther afield to other emerging markets like those in Latin America. Then we felt that if we were going to become an international investor, people should know who we are. We cannot continue to remain a mystery. And, therefore, we decided that we would come out with our financials on a group basis, what we call the Temasek Review.

We also issued bonds, which again required us to reveal much of our financials to the bondholders. So we became known among international investors because many of the investments we made were with co-investors. And co-investors needed to be comfortable with who they were dealing with and needed to know more about us. And that's one of the main reasons why we decided that we'll open our books, as it were, to the investment public.

Then we speeded up the governance model of Temasek. When Temasek was set up, the idea was that civil servants and the Government would not be involved in business. Therefore, investments were put in Temasek. But the process of the Government not being involved took time to develop.

And because of the early years of history, the first 15 years or so, of being very closely connected with the Government, key decisions were made in close consultation with the Government, including the appointment of chairman, appointment of directors, appointment of chief executive officer (CEO).

And in fact, before Ho Ching, all the CEOs were civil servants. So we have instilled that process of Temasek becoming more and more commercially driven, almost a private sector kind of enterprise.

And now, appointments within Temasek, as well as in Temasek portfolio companies, decisions on who is to be on the board, who should be the chairman, who should be the CEO, are all taken at the board level.

That's a major change and it makes us quite distinct and unique in the world of government- owned enterprises.

As with any private enterprise, if you do a major move, you will speak to your main shareholders - it happens in the private sector. So obviously, you know, we don't keep secrets from the Government. We keep them informed. But basically at the end of the day, the board, the management of Temasek are responsible for the performance of Temasek.

Similarly, in our relationship with our own companies, we leave it entirely to the board and management, we do not appoint our own people on the board. We do recommend people but the boards make the decision.

Another major development over the last 13 years has been the composition of the boards of these companies, where 25 per cent of the members of the boards of the Temasek portfolio companies are non-Singaporeans because all of our companies are now global companies - whether it's SingTel or SIA. They operate in the world and they need to get successful businessmen who understand different markets to be on their board and we had managed to persuade many people to come on the boards of our companies. Temasek itself has Swedish businessman Marcus Wallenberg and we'll be getting other non-Singaporeans to come on board.

The board of Temasek, including myself, have spent a lot of time meeting international business people both in Singapore, as well as during our travels. We have built up quite a good database of people who are successful, who have an interest in this part of the world, who are friendly to Singapore, who can form the pool from which we can draw directors for Temasek as well as for Temasek companies. This has taken a lot of effort but we have now a good database.

Mr Dhanabalan, you spoke much about satisfaction but there will always be the naysayers about Temasek, its work and the people who helm Temasek. What's your message to these naysayers?

Let the results speak for themselves. We are not in the exercise of publicly defending what we do. As an investment house, there will be ups and downs in the value of portfolio, we've had many crises to go through since we started and I personally have gone through many economic crises in my life as in business, in the civil service... So people may be naysayers, they may be critical, especially where there's a downturn and our portfolio value goes down, they say we’ve lost money. When the portfolio goes up, they say, oh, that's because market prices have gone up. So this is almost an exact quotation of what I read in the media.

We cannot be affected in our job by what the market perception is. At the end of the day, the performance must be the result.

Mr Dhanabalan, comparing the experience of Mr Lim Boon Heng and yourself: When you became Temasek chairman, you already had experience as chairman of DBS as well as Singapore Airlines, whereas Mr Lim does not have that experience. So what gives you the confidence that he has that business acumen, investment acumen that you yourself had when you took over as chairman?

No two chairmen can be the same, we all come from different backgrounds. So we have to see whether, first of all, the person is able to learn quickly, whether he has shown himself to be able to fit into new environments and Lim Boon Heng has shown that. He was in NOL (Neptune Orient Lines) before politics, plunged into the union movement which he knew nothing about and he made a very good, fantastic success wherever he was.

So adaptability, ability to learn, rapport with people under whom you work, the way you see yourself as a general leading the charge as part of the team working on strategies, working with that, I think he has all that in my view is required to be a good chairman of Temasek. His background is different, his only commercial background is NOL but in the unions, he was very much involved with businesses of unionists, FairPrice and so on. As you know, he put together the unions under a union group, a cooperative holding company. So he's got a wide variety of business interests and he's been keeping tabs on those business interests.

A rare breed of leader lost with Dhana's exit

By Robin Chan, The Sunday Times, 4 Aug 2013

When Mr S. Dhanabalan stepped down as chairman of Temasek Holdings on Wednesday, he ended a glittering 53-year career in the private and public sectors.

His retirement at the age of 75 marks the exit of another of Singapore's second generation of leaders.

It also means Singapore loses a rare breed of leader who brought corporate experience into the world of government.

When he entered politics in 1976, Mr Dhanabalan left behind a career as a rising star in DBS Bank.

Handpicked and mentored by the late Dr Goh Keng Swee - Singapore's foremost economic architect - Mr Dhanabalan rose quickly through the People's Action Party (PAP) ranks, eventually holding a variety of key portfolios in government including foreign affairs, trade and industry, and national development.

His generation was the first of the technocrats, plucked from a high-flying career in the corporate world to serve their country in politics.

Mr Dhanabalan's generation of political stars included Emeritus Senior Minister Goh Chok Tong, former managing director at container shipping firm Neptune Orient Lines, the late former president Ong Teng Cheong, who was an architect with his own practice, and President Tony Tan Keng Yam, who was being groomed to take over the helm of OCBC Bank.

Having vastly successful private sector careers were key attributes of that generation of leaders who took Singapore forward. But that may not be the case in the future.

Looking at PM Lee's current Cabinet, out of the 18 members, five have private-sector experience. Among them: Defence Minister Ng Eng Hen, who was a top surgeon, and Foreign Affairs and Law Minister K. Shanmugam, a top lawyer.

Health Minister Gan Kim Yong left the Administrative Service and later headed Nat-Steel; Minister in the Prime Minister's Office Grace Fu was chief executive of the then PSA Corporation, which manages Singapore's ports; and Environment and Water Resources Minister Vivian Balakrishnan was the chief executive of Singapore General Hospital.

Looking further ahead to the fourth generation of leaders, the numbers dwindle further. All four men identified as potential leaders are either from the military or the civil service.

Education Minister Heng Swee Keat and Acting Minister for Culture, Community and Youth Lawrence Wong were career civil servants.

Acting Minister for Social and Family Development Chan Chun Sing and Acting Minister for Manpower Tan Chuan-Jin are former army generals.

The difficulty of bringing in people from the corporate world into politics is not a new one, and the debate on ministerial salaries over the last few decades speaks to that.

But beyond salary, a more contestable political arena and a vocal electorate, often nasty and brutish, means politics is becoming less attractive even as it becomes more complicated, challenging, and in need of the diversity of talent available in the private sector.

We can only hope that the call of public service will continue to attract good men and women into politics. But will we see the likes of Mr Dhanabalan in politics again? I do not think so, and Singapore will be the poorer for it.