2014 | BiZQ | Oct - Dec by Singapore Business Federation Publications

Oct•Nov•Dec 2014 JOBS BANK & YOU

FAIR framework affects hiring practices? SINGAPORE ECONOMY

BusinessQuotient / Business / People / Opportunities

Manpower costs remain a challenge CORPORATE GOVERNANCE

Driving best practices in companies

A P U B L I C AT I O N O F S I N G A P O R E B U S I N E S S F E D E R AT I O N

Eyeing Opportunities Overseas SBF Chairman SS Teo focuses on internationalisation efforts for members

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1/9/14 9:51 am

Oct•Nov•Dec 2014

Chairman’s Message

Scaling New Heights With A New Council This is my inaugural message to members of the Singapore Business Federation since being elected Chairman of SBF in June. I would like to begin by acknowledging the many significant contributions of my predecessor, Mr Tony Chew. He has truly taken the Federation to a higher level, and I am delighted to succeed him and take it forward. I would also like to thank outgoing Council Members – Mr Abdul Rohim Sarip, Mr Rangarajan Narayanamohan, Dr Robert Yap, Mr Bob Tan, Ms Chong Siak Ching, Mr Chan Chong Beng, Mr Piyush Gupta, Mr Simon Kahn, Mr Mitsuhiro Akiyama and Mr Alvin Yeo – for their strong commitm commitment and support. The 20 2014-2016 SBF Council comprises severa several new faces including Mr Magnu Magnus Bocker, CEO, Singapore Exchan Exchange; Mr Andrew Tjioe, President, Res Restaurant Association of S Singapore; Mr Pek Lian Guan, C Chief Executive Officer, Tiong S Seng Holdings; and Ms Rachel E Eng, Joint Managing Partner, W Wong Partnership. Together with tthe other representatives on the SBF Council, their organisations represent important sectors of the Singapore economy. There are also new appointments from existing Council Members representing the Chinese, Indian, Malay, American and Japanese chambers, as well as a new

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representative from the The Association of Banks in Singapore. My warmest welcome to all new Council Members. I look forward to working with you to extend the interest of Singapore businesses. Since coming on board in June, I have visited some 30 trade associations, chambers and foreign embassies. To these key stakeholders, I underscored SBF’s continued interest to build our relationships and foster closer collaboration through current and new activities for the benefit of the business community. The SBF Council met for a retreat last month to take stock of the Federation’s Strategic Plan to date and – more importantly – shape its goals and strategies through 2018. SBF will continue to champion the interests and the causes of SMEs and larger corporations alike. We look forward to working with you and I wish you all the best in the upcoming year-end festivities as we wrap up 2014 with this final issue of the year.

S S Teo Chairman Singapore Business Federation

30/09/2014 17:14

Oct•Nov•Dec 2014

Contents

Economy Watch

Manpower, Business Remain 06 Costs Challenges for Firms Economists say brighter spots in the Singapore economy lie with companies in the oil and gas industry.

BiZ Voice

How will European Elections Impact Singapore? SBF and EU Centre helped members understand how they can compete effectively in this market.

Commentary

Dennis Galante/Corbis

Putting More Effort into Sustainability Reporting One out of three Singapore companies have made compliance as part of their business processes.

20 Business Quotient (BiZQ) is the official publication of the Singapore Business Federation, reaching out to over 21,000 of Singapore’s business elite, chief executives and entrepreneurs. The quarterly, published in collaboration with SPH Magazines, is your eye on Asian and global business trends, bringing you up to date on industry developments, the economy, country profiles, stories about successful companies and the people who lead them.

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BiZ Feature

Driving Corporate Governance Among Businesses BiZQ looks into how compliance and best practices help companies better manage their businesses internally.

Cover photo: Frenchescar Lim

ABOVE: Globalisation is putting the spotlight on evolving governance issues that, in turn, place greater pressure on directors.

02/10/2014 13:25

The Asset

Specialist Award for Emerging Corporates in Asia Pacific 2014 Specialist Award for SMEs in Asia Pacific 2014

3 months of free banking transactions

Terms and conditions apply.

Asia’s Safest, Asia’s Best Safest Bank, Asia 2009 – 2013, Global Finance Best Managed Bank, Asia Pac 2013, The Asian Banker Best Bank, Asia Pac 2014, Global Finance

*Terms and conditions apply. (1) Only applicable to new corporate customers who open their DBS corporate accounts online. (2) Corporate accounts must be opened between 1 Mar 2014 and 31 Dec 2014 and all other terms and conditions applicable to corporate accounts shall apply. (3) DBS IDEAL fee waivers includes set-up fees and monthly subscription fees. (4) 3 months fee waiver from account opening date for the following transactions conducted using DBS IDEAL – telegraphic transfers, account transfers, MEPS (MAS Electronic Payment System) and GIRO (General Interbank Recurring Order). (5) Prevailing cable charges and agent fees will apply for telegraphic transfers. (6) DBS may vary these terms and conditions or discontinue any promotion at any time without any notice or liability to any party. Deposit Insurance Scheme Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$50,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured. DBS Bank Ltd Co. Reg. No.: 196800306E Aug 2014 TM

Oct•Nov•Dec 2014

4 Publisher Singapore Business Federation

In BiZ With

10 Hoe Chiang Road, #22-01 Keppel Towers, Singapore 089315, Tel: +65 6827 6828, Fax: +65 6827 6807, E-mail: mr@sbf.org.sg, Website: www.sbf.org.sg

Stronger Advocate for SMEs

Mr Magnus Bocker, a new SBF Council Member, shares his views about helping SME members grow and develop.

chairman

Teo Siong Seng chief executive officer

Ho Meng Kit Innovations

chief operating officer

Victor Tay assistant executive director (member relations)

Cheryl Kong director, corporate communications

Gerald De Cotta Publishing Agent SPH Magazines Pte Ltd

Identifying Supply Chain Risks

Innovations in labour productivity improvements will allow logistics companies deploy state-of-the-art automation solutions.

Inside SBF

group editor-in-chief

Caroline Ngui group editor

Joanna Lee-Miller

New Chairman, SS Teo, Helms Apex Chamber SBF steps up efforts to help its members explore opportunities overseas while keeping a close watch on challenges at home.

editorial & creative senior editor

Dora Tay contributing editor

Casuarina Peck sub-editor

International Markets

Annabelle Bok

associate creative director

Jayson Ong art director

Winnie Ong senior designer

Mohamed A Rahman

Sri Lanka, Singapore Renew Bilateral Ties

The jewel in the Indian Ocean is now favourably seen as an attractive investment destination for tourism and leisure sectors.

managing director

Dennis Pua general manager

Christopher Chan sales & client management associate account director

Kaz Lim account manager

Lin Mi’er

SME Resources

INLAND REVENUE AUTHORITY

Call for SMEs to e-File their Taxes

SMEs to use Form C-S, a simplified tax return for qualifying small companies.

manager, client management

Mavis Liang publishing services team head

Alice Chee For advertising enquiries, please call +65 6827 6828 or +65 6319 6326

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This news magazine is published by SPH Magazines Pte Ltd (Registration No. 196900476M) for Singapore Business Federation (Registration No. ROS138/2002TAP). Copyright of the materials contained in this magazine belongs to SPH Magazines Pte Ltd and Singapore Business Federation respectively. Nothing in here shall be reproduced in whole or in part without prior written consent of SPH Magazines Pte Ltd or Singapore Business Federation. Views expressed in this news magazine are not necessarily those of SPH Magazines Pte Ltd nor the Singapore Business Federation and no liabilities shall be attached thereto. All rights reserved. Editorial enquiries should be directed to the editor, BiZQ, SPH Magazines Pte Ltd, Media Centre, 82 Genting Lane, Level 7, Singapore 349567. Tel: +65 6319 6319, Fax: +65 6319 6227, E-mail: bizq@sph.com.sg. Unsolicited material will not be returned unless accompanied by a self-addressed envelope and sufficient return postage. While every reasonable care will be taken by the editor, no responsibility is assumed for the return of unsolicited material. MICA (P) 119/03/2014. Printed in Singapore by timesprinters, Singapore (Registration No. 196700328H).

02/10/2014 13:26

Oct•Nov•Dec 2014

Economy Watch

Eyes on Slower Global Outlook Manpower and business costs remain challenges for many companies.

The MAS expects the Singapore economy to expand from

2-4%

The current consensus among privatesector economists is that the economy will grow by an average of

3.5% will grow by an average of 3.5% in 2014. Commenting on this muted performance, a DBS Vickers economist told BiZQ that “while the year started off with concerns about the tepid US recovery stalling, China’s hard landing, political uncertainties in Thailand and current account deficits among emerging Asian economies, the macro situation has since improved”. Reflecting similar sentiments, Credit Suisse

SPH PH H – The Straits Times; George Steinmetz; Maximilian Stock Ltd, Corbis

ingapore’s gross domestic product growth momentum was on track (3.4%) for the first half of this year, but the hike could have been stronger if not for the volatile weather in the US and macroeconomic tightening policies in China. After reviewing how the Singapore economy panned out in the first half of 2014, the Monetary Authority of Singapore (MAS) expects it to expand between 2% and 4% this year. The current consensus among private-sector economists is that the economy

ECONOMIC GROWTH IN 2014

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30/09/2014 17:24

New recovery phase Peeking into 2015, economists are slightly more bullish with regard to Singapore’s performance in the months ahead. In its latest economic assessment highlighted in its 2013/2014 annual report, the MAS stated: “The recovery in the global economy has entered a new phase. The advanced economies, which have experienced a slow and protracted recovery from the global financial crisis, are expected to provide much of the impetus for growth in the coming year.” MAS Chairman Tharman Shanmugaratnam’s assessment is that “the United States is seeing continued labour market strengthening and resilience in private consumption, enabling it to begin a gradual process of normalising monetary policy”. He added: “In the Eurozone, financial stresses are receding, supporting a modest recovery from recession. Japan has experienced a spurt in growth, aided by

Mr Kuah Boon Wee, CEO, MTQ Corp

“The immediate outlook for the oil and gas industry still remains positive in the markets we operate in, notably the Middle East.”

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GDP, CPI forecasts for Asia GDP Forecasts (%YoY)

CPI Forecasts (%YoY)

2013

2014F

2015F

2013

2014F

2015F

Asia-Pacific

6.3

6.2

6.3

3.7

3.5

3.8

Asian NIEs

2.9

3.6

3.9

1.7

2.1

2.7

SEAN

5.2

4.5

5.3

4.3

4.8

4.9

China

7.7

7.3

7.0

2.6

3.2

Hong Kong

2.9

3.2

3.6

4.3

3.9

3.7

India

4.9

5.6

6.5

9.5

8.0

6.5

Indonesia

5.8

5.3

5.5

6.4

6.5

6.7

Malaysia

4.7

5.4

5.6

2.1

3.5

4.5

Mongolia

11.7

10.0

9.0

10.5

13.1

12.0

Philippines

7.2

6.9

7.3

2.9

4.1

4.0

Singapore

3.9

3.5

4.0

2.4

1.8

1.3

CPI (Consumer Purchasing Index) NIEs (Newly Industrialised Economies) SEAN (South-east Asian Nations)

unprecedented monetary easing. Asia could benefit from a slight uplift in exports this year, although tighter financial conditions and pockets of political uncertainty are weighing down on domestic demand.” “Growth in China, still a major engine of the world economy, is expected to moderate as it seeks to rein in the shadow banking sector and restructure its economy,” he said.

Challenges ahead in 2015 One Citibank economist has forecast that the Singapore economy will grow 4% in 2015. Economist Patrick Yau told BiZQ that “Singapore’s market has historically performed as exports recovered. While there are early signs that exports are improving after two years of weakness, upside potential may be more muted this cycle given domestic challenges in labour and costs”. He added: “A strong externally led recovery will be critical for helping Singapore’s leveraged households with debt digestion.” The availability of manpower and a more competitive, cost-conscious environment are factors that businesses have to contend with.

Source: Citibank, June 2014

Major engines of global growth ● In the US, recent data indicates

continued economic expansion. Both manufacturing and services PMIs are up. The labour market continues to improve. There is also a modest rise in business spending, which is a key driver of growth in the US. ● In China, growth should come

within the consensus range of 7-7.5%. There are some headwinds from ongoing structural reforms, but targeted policy measures will provide support to the economy. This is despite the much-heralded ASEAN Economic Community which takes effect in 2015, said economists. One business entity facing such challenges is SIA Engineering Company (SIAEC). “The outlook for the SIAEC Group has become more challenging with the decline in heavy checks and reduction in engine shop visits,” said CEO William Tan. “Rising business costs will exert increasing pressure on margins. p.8

SPH – The Straits Times

economist Sanjay Mookim said: “Economic indicators in Singapore are now softer than the strong readings in late 2013. Of late, the Singapore Purchasing Managers’ Index (PMI) has tracked the China PMI more than the strong improvements seen in the US and Eurozone (the latter has decelerated recently).” This is as far as any “sombre” news goes, at least for now.

30/09/2014 17:25

Oct•Nov•Dec 2014

Economy Watch

BUSINESS SENTIMENTS UP According to the findings of the latest BT-UniSIM Business Climate Survey, the global economic recovery is slowly being felt here. Business activity picked up in the second quarter with better sales and orders made, and profits were unchanged. The 152 companies that responded to the quarterly survey also expressed more optimism about their

business prospects in the second half of the year. The survey found, however, that in the second quarter, companies achieved better performance overseas than in Singapore across all indicators – whether by sales, orders or business prospects – regardless of firm type, size or ownership. The performance was better than in the first quarter of this year.

Growing Optimism Net balance by type of firm (Q2 2014) TYPE

Efforts to manage costs and to strengthen our competitiveness across core businesses remain a priority,” he explained. To generate growth, the Group will continue to pursue collaborations with strategic partners, such as the recently announced partnership with Boeing, which will “position us well to take advantage of long-term growth opportunities in the region”, said Mr Tan.

SPH – The Business Times

Mr William Tan, CEO, SIA Engineering Company

“Rising business costs will exert increasing pressure on margins. Efforts to manage costs and to strengthen our competitiveness across core businesses remain a priority.”

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SMALL

LARGE

LOCAL

FOREIGN

Sales

-9%

▲8

-7%

▲3

-9%

▲3

-18%

▼23

Profits

-21%

▲4

-21%

-24%

▲5

-18%

▼57

Orders

-19%

▲3

-2%

▲2

-13%

▼3

▼18

Prospects

-9%

▼10

▲3

-4%

▼27

Figures with arrows are changes in percentage points over the previous quarter Source: BT-UniSIM Business Climate Survey

Competitive shipping industry The outlook in the maritime and shipping industry is equally challenging, with key players still grappling with excess overcapacity in container and cargo vessels. One such dominant player is Samudera Shipping Line, a company which operates a network of feeder container lines. Announcing a drop in revenues for the first half of 2014, the company told BiZQ that it “expects operating conditions for container shipping to remain challenging in view of strong competition”. The company spokesperson said: “Steps taken by the group to restructure its services, by downsizing its operations on non-profitable routes, have shown positive results. In the noncontainer shipping segment, it will continue to optimise fleet utilisation including divesting non-performing vessels.”

Upbeat on oil and gas Among the brighter spots in the

Singapore economy are companies involved in the oil and gas sector, which ranges from the upstream segments such as exploration and production to the downstream activities of offshore support and services. One such player is homegrown MTQ Corp, which specialises in the areas of engineering, maintenance and the provision of sub-sea services. “The immediate outlook for the oil and gas industry still remains positive in the markets we operate in, notably the Middle East,” said CEO Kuah Boon Wee. Adding to the point that his group remains confident of the future, Mr Kuah said: “Higher sales activities in Bahrain, Singapore and the Binder Group (a subsidiary company involved in pipe suspension solutions for the oil and gas sector) are key for growth within the oilfield engineering division moving ahead… We will stay focused on securing orders in those areas.”

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Oct•Nov•Dec 2014

Economy Watch ECONOMY ON TRACK FOR GROWTH, SAYS MAS When the Monetary Authority of Singapore (MAS) released its 2013/2014 annual report recently, Mr Ravi Menon, Managing Director of the MAS, said that although the growth momentum for the Singapore economy had slowed down, it would have achieved the 2-4% growth for the full year. A generally favourable external environment, growing domestic demand within Asia and a more resilient domestically oriented sector will lend strength to the Singapore economy. “However, there are downside risks to the growth outlook,” he explained. “This year, the geopolitical risks are larger than the macroeconomic risks.” “The MAS is closely monitoring the ongoing conflicts in the Middle East and Ukraine. Should the conflicts intensify or drag on, they could adversely impact confidence, generate financial market volatility, and increase global oil prices,” he said. “These would, in turn, affect Singapore’s growth, particularly in trade-related sectors and sentimentsensitive segments in the financial services,” he added.

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Economists: Are We Driving Too Hard? Singapore’s economy grew 3.5% in the first half of the year, bringing the growth forecast for the rest of the year to between 2.5% and 3%. This is narrower than the previous forecast of 2-4% by the Ministry of Trade and Industry (MTI), said Prime Minister Lee Hsien Loong in his National Day Message in August. And, economists do not expect a strong upswing in Singapore’s growth. They say that the revised forecast suggests that the economy will grow between 1.5% and 3.5% in the second half. Standard Chartered Bank economist Jeff Ng explained: “Stronger base effects in the second half of the year do imply that if we are to sustain the 3.5% (growth) in the first half, the quarter-to-quarter (growth) will have to pick up. So this is why we have seen the growth target actually being narrowed.” Given that GDP growth was 4.9% in the first quarter, economists said second-quarter growth would most likely be at 2.1%. On a quarter-onquarter basis, this is a contraction of about 0.8%. Bank of America Merrill Lynch economist Chua Hak Bin said that a tight labour market and rising costs “limit the extent to which we can leverage on upswings in global growth”. In addition, growth in the service and construction industries was also expected to remain tepid due to a subdued property market and a marked slowdown in tourism inflows. However, analysts say the risk of a technical recession remains low. “For the second quarter, we may see a slight negative growth in terms of quarteron-quarter (growth); however, for the third quarter, I am not seeing the possibility of negative growth. So I think we may not see any technical recession risk at all

in the whole of 2014,” said United Overseas Bank economist Francis Tan. Analysts say that the next halfyear will be challenging, with rising geopolitical tensions in pockets of the world.

Economic restructuring Against the unrelenting pace of restructuring which began in 2010, Mr Chua said Singapore is losing its competitiveness and flexibility, and this will hurt the economy in the long run. Despite the drive to restructure its economy through various productivity measures recommended by the Economic Strategies Committee, Singapore has not achieved higher productivity growth. Echoing similar concerns, Singapore Management University’s Professor Augustine Tan wondered if it was realistic for Singapore to drive so hard at economic restructuring. He warned that there could be a repeat of the recession in 1985 caused by restructuring too drastically to raise productivity. Responding to these concerns, a spokesman for MTI pointed to positive business expectations in the services sector and low unemployment. At the annual MTI Economic Dialogue held in August, Mr S Iswaran, Second Minister for Home Affairs and Trade and Industry, said that Singapore needs to improve its productivity in order for the economy to grow sustainably. He said that technological progress and human capital improvements will be the two main drivers of productivity growth for Singapore. The Government is promoting investments in new areas such as additive manufacturing that have the potential to create highvalue jobs, he explained.

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30/09/2014 17:25

Oct•Nov•Dec 2014

BiZ Voice

European Elections: What it means to Singapore Businesses ASEAN Economic Community is a good platform for cooperation with the EU.

Michael Wells, Corbis

he economic crisis in Europe has fuelled the recent rise of anti-globalisation sentiments in the European Union (EU). And such sentiments have led to more anti-EU members of parliament during the recent European elections in May. In light of the recent developments, many Singapore businesses were concerned about how the evolving political dynamics may effect an antiglobalisation movement in Europe and consequently affect free trade between the EU and the rest of the world, including Singapore. Hence, the Singapore Business Federation (SBF) and the EU Centre in Singapore held a panel discussion

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– “The European Elections: What it means to Singapore Businesses” – in August to mitigate such concerns from the business community. The panel discussion was officially opened by SBF CEO Ho Meng Kit and EU Ambassador to Singapore Dr Michael Pulch, and moderated by Dr Yeo Lay Hwee, Director of the EU Centre in Singapore.

Growing integration and exchanges During the discussions, two invited speakers – Mr Richard Werly, international economic correspondent at Swiss daily Le Temps, and Mr Shivaji Das, Senior Vice-President of Frost & Sullivan – shared their analysis regarding the situation in the EU. About 80 attendees comprising business, governmental and academic representatives attended the event. According to Mr Werly, the growing integration of ASEAN though the ASEAN Economic Community (AEC)

was seen as “a good platform for cooperation and exchange of ideas with the EU” as Europe looks towards this emerging region for growth and opportunities. He said that the EU is now paying more attention to the ASEAN region, and not just China, compared to six years ago. The EU stands to gain from the regional integration efforts towards the AEC as more exchange and dialogue take place with regards to sharing of experiences in community building and integration.

EU-Singapore FTA Mr Das spoke about the business outlook in Europe for Singapore businesses. He said the business outlook in Europe is good, but investors should be cautious. He noted that the United Kingdom, Germany and Spain recorded strong growth recently. In addition, he said Portugal and the Eastern European economies (in particular the Czech Republic) had shown good growth rates, and the European Central Bank is moving towards freeing much needed funds for these economies. As more Asian companies make inroads into Europe, Mr Das pointed out that companies such as Tata and Huawei have made huge investments into European corporations. He added that as the EU and Singapore were already open markets, the EU-Singapore Free Trade Agreement will be an added benefit for companies keen on doing business in the EU. He advised local companies that “the concern should still be about how to develop your competitive edge in this new market” in terms of finding the right partners and manpower talent. Both speakers highlighted the fact that the EU was not a single entity and that every economy was distinct. It was important for companies to know the context of the countries that they were investing in as the German market was different from those of the Italian and other Eastern European members.

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30/09/2014 17:32

A FAIR-er look at Job Opportunities Singapore employers can tap into the national Jobs Bank.

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the Tripartite Guidelines on Fair Employment Practices, and run for or at least 14 calendar days. These requirements must be met

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For more information on the Jobs Bank, visit www.jobsbank.gov.sg.

WHAT YOU SHOULD KNOW Singaporeans with a valid SingPass can register for an account with which to tap into online job applications via the Jobs Bank. They can: ● Upload their resumes or be guided to create a resume; ● Set email or SMS alerts on new job vacancies based on their job preferences; ● Shortlist suitable job advertisements; ● Enable their resumes to be searched and considered by employers; ● Apply for job advertisements and track the status of their job applications. Employers with a valid Unique Entity Number (UEN) can register

for an account on the Jobs Bank after obtaining the e-Services Authorisation System (EASY) access code from the Inland Revenue Authority of Singapore with which to post job vacancies and support their hiring objectives. They can: ● Advertise and manage job vacancies; ● Receive job applications and resumes online from registered job seekers; ● Search and shortlist candidates within the portal’s candidate database. Companies can find out more about their UENs and its uses at www.uen.gov.sg/uen/index.do.

SPH – The Straits Times & The Business Times

ocal companies who are looking for talented individuals may most likely find the national Jobs Bank portal a solution to their hiring needs. Since the Jobs Bank was launched in July, the portal has boasted more than 4,300 employers, 12,900 individuals and 16,000 “live” job postings. The portal is managed by the Workforce Development Agency (WDA). The Jobs Bank portal works in tandem with the Ministry of Manpower’s (MOM) Fair Consideration Framework (FCF) which came into effect this August. The FCF sets out clear expectations that employers should consider Singaporeans fairly before hiring Employment Pass (EP) holders. In light of the new rules and regulations by MOM and WDA, the Singapore Business Federation and the Singapore National Employers Federation recently held a briefing on the Fair Consideration Framework and national Jobs Bank. During the briefing, MOM shared with the audience the background and details of the FCF, as well as the resultant changes to the EP application process. For example, companies who are submitting new EP applications from August are required to advertise the job vacancies on the national Jobs Bank. The advertisement must be open to Singaporeans, comply with

before submitting an EP application to MOM. As a general principle, employers should avoid stating a preference for age, race, language, gender, marital status and religion. Advertising on the Jobs Bank would benefit both employers and Singaporean job-seekers as it facilitates better matching of vacancies with job-seekers. Employers would have access to a larger pool of potential candidates and Singaporeans would have better visibility of job openings. MOM explained that the purpose of the FCF is to encourage a level playing field for Singaporeans, and highlighted the importance of considering Singaporeans fairly for job opportunities. In addition, WDA provided a walk-through of how employers can tap on the Jobs Bank’s functionalities to support their hiring needs.

30/09/2014 17:32

Oct•Nov•Dec 2014

BiZ Voice

Launch of Inaugural National Productivity Month A month of industry events in manufacturing, healthcare, retail, hospitality and construction.

ingapore Business Federation (SBF) and the Singapore National Employers Federation (SNEF) will launch the National Productivity Month (NPM) 2014 on October 7 at the Suntec Convention Centre. The NPM is a national-level initiative to showcase and share ideas, methods and perspectives on how companies can improve productivity. The launch of the event on October 7 will be followed by a month-long series of productivitythemed events in manufacturing, healthcare, retail, food services, hospitality, accountancy and construction organised in collaboration with other industry associations and government agencies.

NPM 2014 will bring together industry experts, thought leaders and practitioners who have successfully embarked on various productivity strategies to revamp their business models. Prime Minister Lee Hsien Loong will be the event’s guest of honour. Becton Dickinson President for Greater Asia James Lim will kick off the launch with a presentation on “Getting Employees Engaged to Drive Better Returns and Value-add to the Bottom-line”. This session will provide insights on what companies can do to better engage their employees in achieving higher productivity in the workplace. Mr Lim will speak on how engaged employees can contribute

Singapore Companies Eye Opportunities in Africa Third Africa Singapore Business Forum steps up links.

SPH – The Straits Times

frica is shaping up to be a significant economy for investment due to its rapid economic growth and resource-rich potential. Singapore’s trade with Africa has grown at a rate of almost 12% since 2009 and investments by local firms in the continent have reached S$20 billion to date. Singapore’s business ties with Africa were boosted at the third Africa Singapore Business Forum with a series of deals to expand

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relations in areas ranging from aviation to education. The forum witnessed four signings that took place between Singapore and countries within Africa, including Singapore’s two bilateral investment treaties with Burkina Faso and Ivory Coast to foster greater business and investment opportunities. Second Minister for Trade and Industry S Iswaran, who was at the signing ceremony, said: “The

more by developing new business ideas, revamping processes and demonstrate willingness to be crosstrained. A special track on technology and innovation, “Turbo-charging SMEs to Their Next Growth Phase”, will be moderated by Crimson Logic CEO and SiTF Councillor Saw Ken Wye. This segment will feature industry practitioners who have leveraged both technology- and processcentric approaches in sustaining innovation in enterprises. The panellists will be iAPPS Chairman and Chief Executive Officer Lilian Koh and Motorola Solutions Singapore Senior Channel Manager for Enterprise Yeo Kim Meng. One of the industry tracks will include a segment on “Leveraging Industry Platforms for Sector Transformation” and this session will look at how various government agencies have worked with industry players to develop scalable solutions with potential for mass adoption. The NPM launch event will end with an exhibition and networking sessions for attendees. For more information on NPM 2014, visit www.npm.sg.

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treaties will provide our companies operating in Burkina Faso and Ivory Coast better protection and greater investment confidence, thus promoting investment flows between our countries.” Olam International and Agritech are some of the Singapore firms who already have a presence in Burkina Faso, West Africa. Trade with the Ivory Coast was at S$36.1 million and Singapore’s cumulative direct investments in the country amounted to S$220 million in 2012. Singapore and Zimbabwe also signed an air services agreement to allow carriers from both countries the flexibility to plan their commercial operations and capitalise on market opportunities.

• 30/09/2014 17:32

Towers Watson Data Services OCTOBER

NPM ACTIVITIES

National Productivity Month 2014 Launch Event by Singapore Business Federation and Singapore National Employers Federation

08 – 09

Singapore Innovation & Productivity Conference 2014 by Singapore Manufacturing Federation

08 – 10

Manufacturing Solutions EXPO 2014 by Singapore Manufacturing Federation

Manufacturing Productivity Technology Centre Confererence and Technology Exhibition 2014 by A*STAR’s SIMTech

09 – 10

National Healthcare Productivity Seminar & 4th ILTC Quality Festival by Agency for Integrated Care

13 – 16

Singapore Construction Productivity Week by Building Construction Authority

Is your company’s salary cost-effective and yet competitive? C

16 – 17

SHA/STB Hospitality Summit by Singapore Hotel Association and Singapore Tourism Board

Technology Showcase and SMP Dialogue by Institute of Singapore Chartered Accountants Singapore Retail Industry Conference 2014 by Singapore Productivity Centre and Singapore Retail Association

CMY

19 – 24

CEO Productivity Study to Taiwan by Singapore Chinese Chamber of Commerce & Industry

25 – 30

Best Practises & Productivity Training Mission to Germany 2014 by Singapore Chinese Chamber of Commerce & Industry and Singapore Chinese Chamber Institute of Business

27 27 – 28

29 – 30 30

SiTF PPPO Productisation Series: The New Norm Begins with Visual Studio Food Productivity Conference 2014 by Singapore Productivity Centre and Singapore Productivity Association 6th Business Excellence Global Conference by SPRING Singapore 20th Business Excellence Awards and The Inaugural Singapore Productivity Awards by SPRING Singapore, Singapore Business Federation and Singapore National Employers Federation

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towerswatson.com

Oct•Nov•Dec 2014

Commentary

Putting More Effort into Sustainability Reporting Singapore businesses need to improve their processes.

nly one out of three listed companies in Singapore are communicating their sustainability efforts, according to a new study released by the Singapore Compact for Corporate Social Responsibility and the National University of Singapore Business School. The study – Accountability for a Sustainable Future – revealed that of the 537 listed companies who took part in the 2013 survey, only 160 communicated information related to the governance, economic, environmental and social aspects of their businesses to their stakeholders. However, this is a significant improvement over the 79 companies which did so in a 2011 report. Of the 160 companies, 19 used internationally recognised

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sustainability reporting frameworks which provided more comprehensive and in-depth information about their businesses to their stakeholders. The study also revealed that 68 companies have made information available in their annual reports and corporate websites. The top three sectors with the highest level of sustainability disclosures are the multi-industry, hotels and transport, storage and communication sectors. The study also shows that companies that provided sustainability information were evenly distributed among large, medium and small companies. This was in contrast to the previous 2011 findings in which largeer companies accounted for

SINGAPORE SUSTAINABILITY AWARDS 2014 This year, SBF hosted the fifth Singapore Sustainability Awards, which garnered record participation from companies in urban agriculture, renewable energy, real estate and supply chain management. The quality of the applications had also increased in two categories: Sustainable Business Awards and Green Technology Awards. The winners were announced at the awards presentation gala dinner on Oct 8, 2014 at Grand Copthorne Waterfront Hotel. Mr Lee Yi Shyan, Senior Minister of State, Ministry of Trade and Industry and Ministry of National Development, was the guest of honour.

almost 60% of those who provided such information. The practice of sustainability reporting offers numerous benefits for companies. The preparation of sustainability reports requires a review of internal systems, which allows companies to identify inefficiencies and enact improvements in decision-making and operational processes. Assessing non-financial performance also aids in a firm’s compliance with legal and regulatory requirements, reducing the potential of hefty financial penalties and fines that result from non-compliance. In the short term, companies benefit from increased efficiency and cost reductions. Sustainability reporting also allows firms to gain an in-depth understanding of their exposure to social and environmental risks and opportunities. Actions can then be taken to reap opportunities and mitigate risks, resulting in companies being better equipped to face future challenges. In addition, sustainability reports help companies formulate longterm strategic visions and in turn, resilient business models. ●

30/09/2014 17:40

Embracing sustainability for the next generation Future-ready businesses will have to invest in better certification, inspection and test capabilities. Businesses today operate in an economic, social and environmental landscape that is radically different from decades ago. There is unprecedented pressure to conduct and manage business in ways that protect the environment. In addition, businesses are required to meet the needs of the present without compromising the ability of future generations to meet their own aspirations. The challenge is compounded with the fact that new legislation and voluntary standards are constantly being introduced to ensure businesses become more accountable for their impact on the environment and society at large.

Challenges to sustainability These realities exist in Southeast Asia today, especially with regards to the vast potential of the oil and gas industry. Exploration and prospecting are being undertaken at an

unprecedented pace to meet the ever-growing demand for fossil fuel energy and there is a pressing need to improve the efficiency of some processes such as gas flaring. Reducing gas flaring is an important step as worldwide continuous gas flaring, associated with oil production, is a major problem. When one sees businesses operating from such a perspective, corporate environmental and social responsibility gets to the forefront of business concern. In order to meet this challenge of sustainability and at the same time fulfill the growth in demand, businesses will have to invest in better testing, inspection and certification (TIC) capabilities as this is a crucial first step. Working with an independent TIC company, businesses are then able to achieve an objective view of corporate sustainability reporting, and this will reassure all

General Findings ● Twofold increase in the number of companies communicating their sustainability efforts. ● The largest number of companies

not communicating sustainability come from the manufacturing, services and commerce sectors, and low market capitalisation companies.

Sustainability Communication of SGX Mainboard Listed Companies

377

Companies with no sustainability communication

160

Companies with sustainability communication

Standalone sustainability report + annual report + corporate website

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Annual report + corporate website

Annual report only

This commentary was contributed by Serge Antonini, Senior Vice President of Bureau Veritas Southeast Asia, Pacific. It is a global testing, inspection and certification company and has been operating in Singapore since 1973.

stakeholders that the information is accurate and free of bias. Beyond verifying report data, independent assurance also ensures that the right kind of information is being communicated.

Five stepping stones Essentially, there are five steps to attaining sustainability: The need to address compliance; development of an internationally recognised corporate social responsibility mechanism; embarking on process evolution; seeking continuous improvement; and excellence in environmental sustainability. One example is the building and construction and materials sector. From a sustainability perspective, some of the typical issues that this industry often grapple with include impact on the environment, efficiency of resources used, safety, security of personnel at work and the products used, traceability, as well as supply chain reliability. For an independent TIC company to undertake such a task, it would require the company to have an understanding of various solutions such as the assessment of environmental impact from noise, emissions, occupational safety, ergonomics, securing Green Building/Building and Construction Authority Green Mark certifications, as well as undertaking periodic monitoring. It also needs to know whether the finished products would fit a customer’s environmental expectations, understand the compliance requirements of regulatory environmental standards, have the ability of perform lifecycle assessments, be able to ensure that the business is making the most of new innovations in sustainable design, as well as pursue business continuity. ●

30/09/2014 17:40

ADVERTORIAL

A Perfect Slice of Innovation One dairy-food maker takes a creative approach to crafting unique cheese-based products, while a gourmet cheesecake maker uses ultrasonic technology to produce perfectly sliced portions. Unlocking the creativity of cheese

new uses for them,” said Mr Iizuka. “We know that competitors from Australia, New Zealand and the US have big factories in terms of the size of production infrastructure and volume. But at Lacto Asia, our differentiation is based on quality and not on quantity. “As we undertake cheese manufacturing in Singapore, we need to maintain a level of production volume from an economies-ofscale standpoint so as to keep overall costs low. More importantly, our corporate strategy is not to pursue corporate sales without enough regard for the quality or the characteristics of the cheese that Lacto Asia makes,” he said.

various cheese and cheese-based products through its own internal research The next time you and development. bite into a cheese To further improve sausage or savour productivity, the a creamy cheese Masayuki Iizuka, company methodically sauce, think about the Cheesecakes with an Executive Director from brings together suppliers creative and technological ultrasonic touch Lacto Asia Pte Ltd who provide quality innovations that go into Mr Daniel Tay, founder of ingredients, and makers with better making these culinary delights. Foodgnostic Pte Ltd, believes manufacturing technology, to Dairy-product manufacturer in harnessing the power of support Lacto Asia’s innovative Lacto Asia Pte Ltd listens to what its ultrasonic technology for his dairy-product development. customers want in terms of the types food-supply business. Mr Iizuka explained and flavours of cheese. The company The company offers that the competitive then encourages these customers baked goods, especially global market for dairy – which include bakeries, cafes, French-style cake products is certainly restaurants, chilled-food and frozencreations and gourmet not short of cheese food manufacturers – to incorporate cheesecakes, and suppliers. “There its unique cheese offerings into supplies them to are many cheese their own fi nal products. restaurants and hotels. suppliers in the world, “At Lacto Asia, we even go one At Foodgnostic, and industrial cheese step further,” Executive Director it takes three to four Daniel Tay, founder of can be easily imported Masayuki Iizuka told BiZQ. “We bakers, as well as Foodgnostic Pte Ltd from Australia, New listen to our customers when they the use of robotic Zealand and the United States. tell us how they can use customised technology, to produce around “At the end of the day, it all cheese products, and we show them 1,000 cheesecakes a day. depends on how the cheese will what the fi nished products will look Their robotic ultrasonic be applied (into the fi nal product) like. Then, we work towards helping slicing machine can produce 12 and delivered to the consumers,” them achieve what they want.” sliced cheesecake portions of he said. “In many cases, industrial The company believes that precisely the same size every suppliers manufacture cheese and productivity through innovation seven seconds. This ensures cheese-based products based on is the key to unlocking its that cremes and fi llings remain their own notions of the customer’s potential, as this will help it to intact – and that the cake creations preferences, needs and requirements. create food products that are are cleanly sliced every time. “While we try to educate our designed for specific markets. Foodgnostic began its operations customers, the important goal for us One of the company’s strategies a year ago at its 16,000 sq ft is to make unique cheese products is to use its proprietary Japanese facility, KA Foodlink, in Kampong and help our customers to develop technology to modify and customise Ampat. It also launched an online

ADVERTORIAL

specialist cheesecake shop, Cat & The Fiddle, earlier this year. With a team of 50 staff, the right expertise and the effective use of technology, Mr Tay was able to build a food contract manufacturing business which generated S$7 million in revenue within one year of launching its operations. “At Foodgnostic, what we have done is to introduce technology into our business without sacrificing the quality of our products. As a result, most of our customers know they get great and tasty cheesecakes,” he told BiZQ. And this is why customers in Singapore keep returning for his cheesecake creations.

Value through partnerships

Mr Tay said enthusiastically that the cheesecakes are also in demand in places as far away as Vietnam. And all this is made possible because of two key strategies. First, Mr Tay’s immense experience in the patisserie-cafe trade enabled him to garner the right knowledge for the food and beverage industry. In 1998, he founded Bakerzin and turned it into a successful business which he sold in 2007. Since then, his plan has been to make use of technology in every aspect of his business, he said. Second, the deployment and management of a technology-based business has taken Foodgnostic into a new creative realm. His

As an Asia-focused real estate investment and capital management company, we believe in the value of building strong relationships with our customers, business partners and investors. Through these, we are able to grow together and create business communities that share in the rewards of our collective success.

online cheesecake store (www. catandthefiddle.com) does away with the need for the additional manpower that would be required to staff a retail shop. “Today, it is possible to use Internet technology to do many things in business,” he explained. “We have used technology to create an online store, and with online purchasing having become part and parcel of life, it helps drive our business.” He exclaimed excitedly: “How many online shops are able to deliver 1,000 cheesecakes a day?” “It is because of technology that we can do what we are doing today,” he said, adding that he plans to take his savoury delicacies far and wide. This article is brought to you by Mapletree Investments Pte Ltd.

We appreciate the support of all our business communities and are proud to be an active member of every one of them. You cannot put a price on partnerships but at Mapletree, we appreciate the value that they create.

www.mapletree.com.sg

Oct•Nov•Dec 2014

BiZ Feature

I Pushing Ahead with

Corporate Governance

Driving best practices Within the Singapore context, corporate governance champion Mr David Gerald said that the Securities Investors Association of

Richard Morrell/Corbis

Globalisation puts the spotlight on growing business challenges.

mplementing best practices for productivity improvements. Squeezing more out of a business for net margin gains while keeping an even keel in the competitive industry. Trying to secure and retain good talent amid labour supply constraints. These are everyday challenges that businesses in Singapore – both large and small – grapple with every day. In addition, businesses are increasingly being asked to comply with external corporate governance rules in order to ensure that best practices are being adhered to. Corporate governance has become increasingly relevant to all organisations that believe in enhancing long term shareholder value. Good corporate governance embodies both enterprise (performance) and accountability (conformance).

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30/09/2014 17:53

On-the-ground disclosure Mr Irving Low, KPMG Partner and head of risk consulting, told BiZQ that it was “encouraging to see Singapore companies continuing to improve their corporate governance disclosures”. “This is reflective of the Singapore corporate governance landscape which contains a balance of mandatory requirements and ‘principle’ based requirements to allow companies the flexibility to establish relevant and meaningful governance practices for their organisations,” he explained. The Monetary Authority of Singapore, the Accounting and Corporate Regulatory Authority and the Singapore Exchange recently issued the second edition of the handbook, Guidebook for Audit Committees in Singapore. In essence, this handbook provides guidelines to the audit committees of listed companies here. The book is one of the efforts of the Audit Committee Guidance Committee, established in 2008, and aimed at strengthening corporate governance practices of listed companies in Singapore. Members of the committee were drawn from the business community and stakeholder groups. KPMG Singapore Managing Partner Tham Sai Choy told BiZQ that the latest edition was timely. Since the guide was launched in 2008, the global financial crisis has raised expectations of corporate governance standards

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“Globalisation is increasingly putting the spotlight on the evolving governance issues faced by subsidiaries and other business entities, resulting in even greater pressure on directors of such organisations.” around the world. The latest edition contained updated references to relevant legislation, listing rules and the corporate governance code. He explained: “In an increasingly demanding and complex business environment, lessons in success can be drawn from past and current best practices.” “This latest Guidebook is a compendium of recent experiences, knowledge and practices of audit committees and will be a valuable source of information for accounting members. It also contains additional guiding materials to help accounting members navigate future challenges.” Since the global financial crisis, corporate governance – which refers to the processes and structure in which the business and affairs of the company are directed and managed – is a subject matter that has gained strong traction.

Scorecard on corporate governance New studies on how businesses are doing in the area of corporate governance are often conducted by various financial institutions around the world. The ASEAN Corporate Governance Scorecard, jointly developed between the Asian Development Bank and the p.22

Snapshot of Revised Guidebook The revised “Guidebook for Audit Committees in Singapore” comprises the following six sections: ● AC Composition: This section outlines the roles and responsibilities of AC members. ● AC Agenda: The second section sets the scope of the AC, including its interaction with the Board, its annual workplan and periodic meetings. ● Risk Management and Internal Controls: This section outlines the common risk governance structures and the various frameworks to ensure that the company’s risk management and internal control system is adequate and effective. ● Internal Audit: This section examines the considerations when deciding whether the internal audit function should be in-house or outsourced. It also covers the common issues relating to the AC’s oversight over the internal audit function. ● Financial Reporting: A key duty of the AC is to review the significant financial reporting issues and judgements so as to ensure the integrity of the company’s financial statements. This section also highlights factors indicative of weaknesses in the financial reporting process. ● External Audit: The last section describes the role of external auditors, factors that the AC should consider when evaluating the independence of external auditors, as well as considerations for the appointment of external auditors, their remuneration, and terms of engagement.

* AC denotes “Audit Committees” Source: WongPartnership LLP

SPH – The Business Times

Singapore will continue to drive best practices in this area. “Corporate governance has always been a very relevant and important subject,” he said. “Lately, in view of some spectacular instances of abuse and excess, especially in America, corporate governance has become not only the concern of the business community and the authorities but also of the general public.” He admitted though that because there is a great diversity of circumstances in which companies operate, it would be inappropriate to advocate very specific rules.

Associate Professor Themin Suwardy, Singapore Divisional President, CPA Australia

02/10/2014 13:51

Oct•Nov•Dec 2014

BiZ Feature ASEAN Capital Markets Forum, provides a rigorous methodology benchmarked against international best practice. This is to assess the corporate governance performance of publicly listed companies in the six participating ASEAN member countries (Indonesia, Malaysia, The Philippines, Singapore, Thailand and Vietnam). In its annual assessment released in June, the report stated that “the performance of ASEAN publicly listed companies in applying recommended corporate governance principles is commendable, although there is still room for further improvement.” The report added that “domestic ranking bodies have played a significant role in promoting and creating greater awareness of this initiative and the requirements of the scorecard. Continued commitment from all stakeholders will be crucial to ensuring the sustainability of this initiative.”

David Arky/Tetra Images/Corbis

Ensuring good practices Another report shared with BiZQ revealed that Singapore subsidiaries and group entities under holding companies should improve their disclosures of key measures to ensure good governance of the entire group. A newly released report by CPA Australia studied 150 of the largest companies by market capitalisation listed on the Singapore Exchange, Bursa Malaysia and the Australian Securities Exchange. Concerned with the relative lack of attention on the governance of entities within company groups in current governance regulations, codes of practice, the literature and corporate practice, researchers Mr Mak Yuen Teen and Mr Chris Bennett made several recommendations. One suggestion was thatt he laws regulators should review the and regulations relating to the fiduciary duty of directors in ider company groups, and consider the need to clarify

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Common Governance Problems –

Is your Company Facing one of these? Corporate governance problems in groups generally arise where there are unrecognised or inappropriately resolved conflicts between the parent and its entities. Conflicts can manifest in various ways. REGULATORY CONFLICTS Laws and regulations in the jurisdictions where the parent and group entity are domiciled can be in conflict. Examples Include differences in the requirements of data protection legislation, differences in disclosure requirements and different attitudes to dividend remittance. COMMERCIAL OR MANAGERIAL CONFLICTS: Such conflicts are pervasive and arise in a myriad of guises. Examples include: ● New product launches – parent company wants to launch a product not seen to be in its subsidiary’s interests. ● Safety regulations and approvals – parent company is unwilling

it for directors of parent companies, subsidiaries and other group entities. “Organisations have paid little attention thus far to the governance of entities within company groups under current regulations and codes of practice,” said Mr Bennett (refer to story on Common Governance Problems). RSM Ethos Managing Director Tay Woon Teck gave his assessment: “The state of corporate governance in Singapore has improved over the years. Corporates realise the importance of corporate governance in conducting the affairs of their business.”

to disclose detailed product formulations to its subsidiary. ● Transfer pricing – parent company is unwilling to disclose its basis of charges to its subsidiary. ● Sarbanes-Oxley “sign off” – parent company is unwilling to disclose its basis of “management charges” to its subsidiary. ● Conflict over director appointments with the subsidiary’s nominating committee. ● Conflict over senior executive remuneration within the subsidiary’s remuneration committee. ● Parent company seeking confidential information from directors of an associate company. ● Conflicts between the interests of two or more subsidiaries, eg factory closures and other supply chain decisions. ● Conflicts between the organisational and national cultures of the parent and the subsidiary.

Source: Governance of Company Groups, CPA Australia (Singapore), July 2014

However, “the biggest challenge for organisations, especially SME entrepreneurs, is learning how to share power with an independent board, and subject one’s strategies and plans to the due process of the board’s reviews and approvals,” he observed. In summary, the continued awareness of corporate practices requirements is critical and there is no right or wrong approach to each governing rule. As such, greater communication and the sharing of best practices are important in facilitating an understanding of the similarities and differences of different business practices. This will enable organisations of all sizes and types to learn and adopt relevant, adequate and effective corporate governance practices.

•

02/10/2014 13:42

RSM Ethos Managing Director Tay Woon Teck has almost three decades of experience in counselling companies on improving their corporate governance. Mr Tay is a Fellow Chartered Accountant of Singapore, a Fellow of the Singapore Institute of Directors, a member of the Insolvency Practitioners Association of Singapore, and a member of The Institute of Internal Auditors. BiZQ captured his views on corporate governance matters with regard to Singapore businesses. What is your assessment on the state of Singapore’s corporate governance? Mr Tay: The state of corporate governance in Singapore, in my view, has improved over the years. Corporates, both listed and unlisted, realise the importance of corporate governance in conducting the affairs of their business. A recent survey of the Governance Transparency Index conducted by the NUS Centre for Governance, Institutions & Organisations and CPA Australia showed that more listed companies are now complying with the new Code which was published in 2012. This is very encouraging for Singapore. Complying with the Code of Corporate Governance 2012 is a journey and it requires the close collaboration among the board, management, staff, shareholders and regulators. It is important that we promote self-governance and corporates must want to do this willingly. It should not be forced onto them. Many large, publicly listed companies see corporate governance as a culture of doing things right.

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On the other hand, SMEs are wary of corporate governance compliance, especially given that the business environment is extremely competitive. Does this capture the correct attitudes between different groups on their views on corporate governance? Mr Tay: This is not an accurate view. Singapore is an Asian country and places great importance on Confucianism and personal reputation. SMEs do value the merits of better corporate governance. One SME entrepreneur told me that “regardless of whether there is a Code, our father has taught us to be honest, hardworking and treat everybody fairly. This is the essence of corporate governance. We live by these fundamental principles daily. There is no need for us to check the box and declare that we have complied with the 2012 Code.” The issue with our SMEs is not that they don’t subscribe to better corporate governance. Many of our SMEs do not see the need to have third-party independent directors supervising their conduct. They also do not see the disclosure of compliance with the 2012 Code and the written assurance of their compliance to the board and independent directors

as useful. These practices, in their view, do not contribute to the ethos of being humble, honest and hardworking, as well as fair play. In your view, what are some of the biggest pitfalls of internal audits within organisations? Mr Tay: Internal audit is seen as a cost centre in many Singapore organisations, a necessary evil because the 2012 Code requires it. Many organisations view the role of independent auditors (IAs) as that of compliance watchdogs. An effective IA is one that is a proactive catalyst in assisting the board and management in implementing risk management and business improvement activities. It is an integral part of creating value and sustainable development. Therefore, it is essential to bring more talents into and build capabilities in the IA profession. What advice would you give to SBF’s member SMEs in terms of the effort and the journey that they take towards better corporate governance in their organisations? Mr Tay: SMEs need to change the mindset that corporate governance is a checkbox exercise. There is value in building a strong ethics- and principle-based governance structure to guide conduct and behaviour. Better corporate governance provides a sense of purpose and identity in the pursuit of sustainable value and development. Any final thoughts on what more can be done to boost the standard of corporate governance in Singapore? Mr Tay: I believe that self-governance is better than regulatory enforcement. The standard of corporate governance in Singapore is high and improving every year due to the concerted effort of the media, the business community, the shareholders and the regulator in raising the awareness on the importance of good corporate governance. This is a journey and we must continue to push for self-governance and personal leadership in the pursuit of sustainable development.

•

SPH – The Business Times; Dennis Galante/Corbis

Singapore SMEs see Need for Corporate Governance

30/09/2014 17:08

Octâ&#x20AC;˘Novâ&#x20AC;˘Dec 2014

In InBiZ BiZWith With

Strong Advocate of SMEs BiZQ speaks to Mr Magnus Bocker, CEO of Singapore Exchange Ltd and new SBF Council Member, on his views about helping member SMEs grow and develop.

Mr Magnus Bocker Chief Executive Officer, Singapore Exchange Council Member, Singapore Business Federation Member, Shanghai International Financial Advisory Council

Kelvin Cuff

Council Member, The Institute of Banking and Finance (Singapore)

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Chairman, Investment Committee, The Institute of Banking and Finance (Singapore) Advisory Board Member, Sim Kee Boon Institute for Financial Economics, Singapore Management University Chairman, Diversity Action Committee (Singapore)

30/09/2014 16:34

mong the new Singapore Business Federation (SBF) council members announced at the Federation’s 12th Annual General Meeting recently, Mr Magnus Bocker, CEO of Singapore Exchange Ltd (SGX), was excited to bring his experiences in Singapore’s financial services sector on board the 2014-2016 SBF Council. Having seen tremendous growth in the Singapore market over the past year, Mr Bocker has the financial knowledge background to help the country’s nascent home-grown enterprises expand and develop their businesses. At a recent interview with BiZQ, he said that he was a strong advocate of SMEs, which make up more than half the members of the Federation. Mr Bocker spearheaded the creation of OMX (the Nordic Exchanges Company) in 2003 and subsequently played a key role in the merger of OMX and NASDAQ in 2008. He then became the former president of NASDAQ OMX from 2008 to 2009. After two decades of leadership experience in the exchange industry, Mr Bocker joined SGX in 2009. In Singapore, he is also a council member of the Institute of Banking and Finance and a member of the Advisory Board of the Sim Kee Boon Institute for Financial Economics at Singapore Management University. BiZQ recently caught up with Mr Bocker to capture some of his key thoughts. SBF has made tremendous strides in breaking new ground, including the growth of outbound/inbound missions and delegations. Can you share your views on what else can be done for SBF members? As an apex business chamber, SBF has been one of the key enablers of Singapore’s success as an international capital market and trading hub. In today’s interconnected world, SBF plays an even more critical role

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SGX is a strong advocate of SMEs and we understand the journey they undergo in their rite of growth. Don’t forget that all our SGX-listed companies were once SMEs. in championing the interests and uniqueness of Singapore companies. I am therefore excited and honoured to be a part of the commitment to strengthen the presence of Singapore companies both locally and globally. One of the several suggestions made this year is that SBF members, especially SMEs, should be made more aware of a growing variety of financing options available to them. How you do see SGX bringing this experience to bear, considering that seeking a public listing is not for every business? As an Exchange, SGX has been successfully connecting investors with corporates in search of capital. We have the ability to mobilise capital from all over the world to Singapore businesses that require the funds to expand. IPOs or public listing is not necessarily the only option. Local companies can raise funds also through our bond market and the Catalist board. In addition, we also provide guidance and education to support our local companies. For SMEs, laying the foundation and practicing good corporate governance, transparency, and sustainability are crucial towards their long-term success. One of the aspirations of SBF is to raise and strengthen the voice of SMEs in government. In your

BANKING ON ENVIRONMENTAL ISSUES The call to address environmental concerns has grown increasingly loud, so how can financial institutions go beyond reputation and risk management to embrace sustainable practices? Magnus Bocker, CEO of SGX and Chairperson of the company’s Sustainability Committee, believes that financial institutions can no longer ignore credit risks brought on by severe weather patterns impacting infrastructure or agricultural production, water stress affecting production across sectors, or regulations that affect the value of carbon assets or carbon-related infrastructure. Instead, banks increasingly need to adapt to these emerging challenges through sustainable solutions. A recent guidebook produced by the World Wide Fund for Nature (WWF) – Environmental, Social And Governance Integration For Banks: A Guide To Starting Implementation – shows how financial institutions acting as lenders, financial advisors and capital raising agents can adopt sustainable practices.

capacity as council member, how do you see yourself supporting this goal? SGX is a strong advocate of SMEs and we understand the journey they undergo in their rite of growth. Don’t forget that all our SGX-listed companies were once SMEs. We also understand the demands on and expectations of CEOs and their management as they take their companies through various stages of development. Therefore, we will extend our best support and efforts, as an exchange and market operator, to assist local companies to pursue opportunities both onshore and offshore.

•

30/09/2014 16:34

Oct•Nov•Dec 2014

Innovations

Identifying Supply Chain Risks Ensuring businesses remain competitive and future-ready.

SPH – Lian He Zao Bao

ingapore’s supply chain ecosystem includes critical operations led by many logistics and supply chain companies. One of these is homegrown YCH Group, helmed by Dr Robert Yap (chairman and CEO). This ecosystem is supported by a strong pool of supply chain talents and a cluster of well-established knowledge partners comprising top consulting firms and research

institutes. The Singapore Business Federation (SBF) recently signed a Memorandum of Understanding with MIT’s Global Supply Chain and Logistics Excellence (SCALE) Network, an international alliance of leading-edge research and education centres, to launch the Certified Supply Chain Management Professional training

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programme, which is scheduled to commence in first quarter of 2015 and aims to raise the

standard of human resources expertise in this industry. Building this strong ecosystem will allow logistics companies to continually develop innovative solutions to better address complex and sophisticated supply chain needs. Such innovation will also allow logistics companies to devise and deploy state-of-the-art automation solutions that will help achieve significant land and labour productivity improvements.

Expanding industry The logistics and transportation industry in Singapore is expected to grow at a compound rate of about 6.2% every year and be worth more than $51 billion in 2016, according to a report by consultancy firm

Dr Mahender Singh, Executive Director of MIT Global SCALE Network

“With shifts in demographic patterns around the world, technological advances are also changing the way trade, technology and investment flows are connecting with the t global market.” Frost and Sullivan in 2012. Last year, the logistics and transportation industry in Singapore accounted for about 7% of economic output and employed about 227,000 workers, according to the Ministry of Trade and Industry. To stay competitive, logistics firms need to upgrade their supply chain capabilities and maximise productivity by taking advantage of new technology and improving their processes. One example is the new container management system, a web-based application that lets its users track what is happening in the container depot. The Container Depot Association (Singapore) developed this system with the help of SPRING Singapore. The online integration that this system allows will help companies eliminate manual data entry error and create a more efficient flow of information. This will cut waiting times at the container depot by up to 30%, which means that container transport operators can deliver 20% more containers in the same amount of time. Container depot operators will also be able to raise their container handling efficiency by 30%.

02/10/2014 13:28

Local, regional synergies Dr Mahender Singh, Executive Director of MIT Global SCALE Network, said that globalisation is compressing time and distance, and people, products and ideas are moving faster than ever before. With shifts in demographic patterns around the world, technological advances are also changing the way trade, technology and investment flows are connecting with the global market. Responding to these trends, leading companies know the

Supply Chain Management Systems Centralising a company’s business management can bring operational improvements, such as: Speed and accuracy of operations Reduced duplication of business processes Improved service, with reduced working capital Improved handling of international customers Better decision making in “constraint” situations Central sourcing cost reduction opportunities

• • • • • •

Using centralised management will bring additional benefits, like: Increased management control Single performance management framework Simplified financial reporting Indirect tax efficiencies Stability/predictability of local tax burdens Leveraging operational improvements with lower tax

• • • • • •

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benefits of having a global view in the way they manage their businesses, yet understand that they cannot lose sight of local market dynamics. So many multinational companies (MNCs) have been expanding into new regions either organically or via mergers and acquisitions to ensure sustained revenue and profit growth, Dr Singh explained. Due to its double digit growth in recent years, the Asia Pacific region is an attractive place to expand in. But with supply chains getting increasingly complicated and costly to maintain, MNCs have ended up with sub-optimal operating models with emphases on local country operations or multiple stand-alone business units within the region. Speaking at a recent seminar organised by SBF on supply chain management, Dr Singh explained how supply chain management (SCM) systems have evolved over the years. Many SCM systems moved from being decentralised to being centralised before finally finding a middle ground between both – centralised planning a with decentralised execution strategy.

Which functions to centralise? Dr Singh said that there are many variants of a centralised principal model for SCM systems and the choice of model depends on many factors. He advised companies to determine the key challenges to the restructuring of their existing supply chains. For example, functions such as research and development, manufacturing, procurement, operations and order fulfilment should be centralised. Sales and marketing functions should remain localised, as having a local sales office is a key value driver due to existing customer relationships. SCM systems have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs, Dr Singh added.

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Singapore is Asia’s Most Innovative Economy Singapore is leading Asia in terms of overall innovation performance, and this is due to its well-linked innovation ecosystem, strong innovation infrastructure, and investments in manpower. According to the Global Innovation Index 2014 (GII) published by Cornell University, INSEAD and the World Intellectual Property Organisation, Singapore topped the regional rankings by moving up from 8th position in 2013 to 7th this year. Switzerland, the United Kingdom and Sweden topped this year’s GII, while Sub-Saharan Africa posted significant regional improvement.

Importance of human capital investment The 2014 Index is focused on “The Human Factor in Innovation” and highlighted the role of human capital in the innovation process as well as the growing interest that companies and governments have shown in identifying and energising creative individuals and teams. The report identified leaders who have created well-linked innovation ecosystems, where investments in human capital combined with strong innovation infrastructures contribute to high levels of creativity. In particular, the top 25 countries in the GII consistently score high in most indicators and have strengths in areas such as innovation infrastructure, like information and communication technologies; business sophistication such as knowledge workers, innovation linkages, and knowledge absorption; and innovation outputs such as creative goods and services and online creativity. Highlighting the critical role talent plays in driving innovation, the Index revealed that better educated citizens are more successful at driving innovation in higher-income economies.

SPH Library

In another example, logistics player DHL partnered Texas Instruments (TI) last year to pioneer Swisslog’s AutoStore system for TI’s Global Distribution Centre. The system has since improved the productivity of the centre’s operations by a commendable 40%.

30/09/2014 16:27

Oct•Nov•Dec 2014

Inside SBF

New SBF Chairman to Focus on Internationalisation Apex chamber steps up efforts to help members explore overseas opportunities while keeping closer watch on challenges at home.

Former Member of Parliament Mr Teo Siong Seng has taken over the helm of the Singapore Business Federation (SBF), with Mr Tony Chew stepping down from the role after six years. Mr Teo, who is the Managing Director of Pacific International Lines, was elected at the first meeting of the 2014-2016 SBF Council held in June. He is also the Chairman and CEO of Singamas Container Holdings in Hong Kong. He plays an active role in promoting Singapore’s shipping industry, serving as Chairman of the Singapore Maritime Institute’s Board of Directors and Governing Council, and of The Standard Club Asia Ltd. Mr Teo said: “I am delighted to accept the chairmanship of SBF. I would like to take this opportunity to thank Mr Tony Chew for his visionary leadership and passion in building a stronger SBF. I would also like to commend the SBF Secretariat, led by Mr Ho Meng Kit, for their dedication and hard work in delivering numerous

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the Middle East and Africa. In particular, he explained that he and the chamber will work closely with trade associations and business chambers to achieve these key objectives.

activities and initiatives in support of the varied needs and interests of SBF members.” He added: “I will work closely with my fellow Council Members and the SBF Secretariat to build on the good work achieved to date and take the Federation to its next phase of development as Singapore’s apex business chamber.” In his interview with BiZQ, Mr Teo said he was aiming to focus on helping SBF members to internationalise so that they can explore external markets, particularly ASEAN, China, South Asia,

Given your experience with working with various business chambers in recent years, do you see opportunities that are specific to SBF, and how do you intend to take them forward? As Singapore’s apex business chamber, SBF plays an important role as the bridge between the business community and the Government. Its sizeable membership of 21,000 corporate members contribute significantly to the Singapore economy, and account for some two million employees, or twothirds of the city state’s entire workforce. Its voice and standing are, therefore, representative of the wider business community. One of my key goals is to work even more closely with trade associations and chambers (TACs) on the challenges posed by economic restructuring. Working collectively, we can assist companies in

Mr Lim Hng Kiang, Minister for Trade and Industry congratulated Mr Teo on his new appointment.

“I would like to congratulate Mr Teo Siong Seng on his appointment as SBF Chairman. With his extensive industry experience and contributions at the helm of the Chinese Chamber, I am confident that he will lead SBF to new heights.” voicing their needs to the Government, and help them build capabilities and tap into opportunities both locally and overseas. Asia, ASEAN in particular, is on the rise. I aim to focus on increasing our members’ reach in ASEAN, China, South Asia, as well as the Middle East and Africa. Over the years, SBF has developed strong connections with these markets through business missions and the more than 150 Memoranda of Understanding it has signed with over 60 countries. SBF will leverage its strong foundation and global links to extend its reach into overseas markets to develop strong and long-lasting business relationships with companies, business chambers and

30/09/2014 17:34

government agencies. SBF will continue to advocate for SMEs through the SBF-led SME Committee (SMEC) and help them through restructuring. Importantly, SBF will work closely with trade associations and business chambers to achieve these key objectives. SBF has achieved several notable milestones in recent years with the inauguration of the SMEC in 2011, the launch of the SBF Foundation and SBF Institute in 2013, and the NTU-SBF Centre for African Studies in 2014. SBF will also relocate to its new office at the SBF Center in late 2016 and is looking forward to providing more services and facilities to members. SBF is midway through its 2012-2016 Strategic Plan. It has set its sights on becoming a more issuescentric organisation, with stronger engagement of the business community and the Government. It has made good progress as a credible voice of business and a value creator in helping companies to build capability and access international markets. We are in the midst of reviewing our Strategic Plan with a view to updating it to cover our goals and strategies up to 2018. As Chairman of Singapore’s apex chamber, do you see an opportunity for greater collaboration between member chambers? Since its inception in 2002, SBF has been engaging

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BUILDING BRIDGES BETWEEN BUSINESSES, GOVERNMENT

governments, trade associations and chambers and businesses both locally and overseas. The relationships cultivated form the backbone of many of the collaborative programmes and partnerships SBF currently maintains in serving the needs of the local business community. Through the SMEC, SBF works closely with TACs to surface the needs and concerns of the business community to the Government. It will strengthen its partnership with TACs on joint business missions and capacity building initiatives such as the SBF Mentorship programme, to help SMEs develop internal capabilities. This October, SBF and the Singapore National Employers Federation, with the support of TACs, are organising National Productivity Month to rally the business community to achieve a competitive edge through productivity. In your view, what are the top three issues that can be advocated from SBF’s perspective? Manpower, productivity, and rising business and compliance costs are the main issues that businesses face as the economy restructures.

Mr Teo Siong Seng is the Managing Director of Pacific International Lines (PIL), one of the largest shipowners and operators in Southeast Asia, with a focus on Asia-Africa and the Middle East. He is also the Chairman and Chief Executive Officer of PIL’s listed subsidiary, Singamas Container Holdings in Hong Kong. Mr Teo was a Nominated Member of Parliament from 2009 to 2014 and as the voice of the business community, he functions as a bridge between the business community and the Government. Prior to his appointment as Chairman of SBF, Mr Teo was its Vice-Chairman from 2010 to 2014, representing the Singapore Chinese

Chamber of Commerce in which he served as President from 2009 to 2013. Mr Teo’s several other appointments include: Board Member, DukeNUS Graduate Medical School Governing Board; Board Member, SinoSingapore Guangzhou Knowledge City Investment Development Co; Director, Business China; Independent Director, China Shipping Container Lines Company; and Standing Council Member, China Overseas Exchange Association, Beijing. Mr Teo is also the Honorary Consul of The United Republic of Tanzania to Singapore, and is the Joint Chairman of the Africa South East Asia Chamber of Commerce & Industry.

We feel that companies have been distracted by economic restructuring at the expense of pursuing growth. SBF is committed to working with TACs and the Government to help businesses overcome their challenges by leveraging a wide array of assistance schemes. It will also proactively help companies explore overseas markets and tap into opportunities that unfold from ASEAN Economic Community 2015, the Trans-Pacific Partnership, the Regional Comprehensive Economic Partnership, and other multilateral trade

initiatives over the horizon. I urge members to bear with the pain and press on during this difficult transition period. If it is any consolation, many other countries are also going through economic restructuring. Anecdotal evidence of an uptake in Productivity and Innovation Credit grants are early indicators of capital investments by companies. More companies are investing in technology and automation, and in redesigning their processes to realise improved overall efficiency, quality and productivity.

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30/09/2014 17:34

Oct•Nov•Dec 2014

Inside SBF

Mr Tony Chew Thanks Members Stepping down after six years of helming SBF, Mr Tony Chew is very proud of the progress the apex chamber has made since 2001 when he helped conceived the Federation as a member of the Pro-tem Committee. In his farewell remarks, delivered at the 12th SBF Annual General Meeting, Mr Chew warmly recounted how SBF had worked collectively to build the capability of its

Mr Tang Kin Fei, SBF Vice-President and Group President & CEO of Sembcorp Industries, thanked Mr Chew for his leadership and commitment to the formation and development of SBF.

“During his tenure as Chairman, Tony built on the foundation of SBF and brought it to the next level. He has given selflessly of his time to shape the Federation’s activities, direction and influence. He has worked tirelessly to bridge the private sector and Government.”

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members and improve the business operating environment both at home and abroad. Reflecting on SBF’s growth, Mr Chew said: “Over the last several years, we have achieved major milestones. SBF has seen a steady rise in activities, missions and delegations. It has become a major voice of the business community. “As I wrap up my six-year term as SBF Chairman, I am leaving the Federation on a high note and in good hands.” During the AGM, Mr Chew thanked the Board of Trustees, fellow Council Members, the SBF Secretariat, business partners and SBF Members for their strong commitment, dedication and support. In addition, he thanked the outgoing Council Members: Dr Robert Yap, SBF Vice-Chairman and Chairman & CEO of YCH Group; Mr Abdul Rohim Sarip, SBF Vice Chairman and Immediate Past-President of the

Mr Lim Hng Kiang, Minister for Trade and Industry praised Mr Chew’s tenure as SBF Chairman.

Singapore Malay Chamber of Commerce & Industry; Mr R Narayanamohan, SBF Vice-Chairman and Chairman of the Singapore Indian Chamber of Commerce & Industry; Mr Bob Tan, SBF Honorary Treasurer and Chairman of Jurong Engineering; Ms Chong Siak Ching, SBF Deputy Honorary Treasurer and CEO of the National Gallery Singapore; Mr Chan Chong Beng, President of the Association of Small and Medium Enterprises; Mr Piyush Gupta, CEO and Director of DBS Group; Mr Mitsuhiro Akiyama, President of the Japanese Chamber of Commerce & Industry in Singapore; Mr Simon Kahn, Chairman of the American Chamber of Commerce in Singapore; and Mr Alvin Yeo, Senior Partner of WongPartnership LLP. Mr Chew said: “It has

“Over the last six years, Mr Tony Chew has steered SBF to advocate for pro-business policies that have enhanced our business environment and strengthened the competitiveness of Singapore businesses. We deeply appreciate his contributions in growing SBF as the key voice representing the interests of Singapore-based business, locally and abroad.” been an immense honour and privilege to work with all of you, and to have played a part in building SBF as Singapore’s apex business chamber.”

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30/09/2014 17:40

SBF Announces New Council Members 2014-2016 list includes new representatives of the major trade associations and chambers. Twenty-one members of the 2014-2016 SBF Council were announced at the Annual General Meeting in June, and the list included representatives of major business chambers, trade associations and businesses. Among the new Council

Members are Mr Magnus Bocker, CEO of Singapore Exchange, Mr Andrew Tjioe, President of the Restaurant Association of Singapore, and Mr Pek Lian Guan, CEO of Tiong Seng Holdings. Separately, Ms Rachel Eng, Joint Managing

Partner, WongPartnership LLP, was co-opted as a Council Member. The new representatives of the major trade associations and chambers include: ● Mr Thomas Chua, President of the Singapore Chinese Chamber of Commerce & Industry ● Mr Zahidi Abdul Rahman, President of the Singapore Malay Chamber of Commerce & Industry ● Dr R Theyvendran, Chairman of the Singapore Indian Chamber of Commerce & Industry

● Dr James Andrade, Chairman of the American Chamber of Commerce (Singapore) ● Mr Junichi Sasaki, President of the Japanese Chamber of Commerce & Industry (Singapore) ● Mr Samuel Tsien, Chairman of The Association of Banks in Singapore

SBF represents 21,000 companies, as well as key local and foreign business chambers, that contribute significantly to the Singapore economy.

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SINGAPORE BUSINESS FEDERATION COUNCIL 2014-2016 1 MR TEO SIONG SENG

7 MR LAWRENCE LEOW

13 MR GEORGE HUANG

18 MR JUNICHI SASAKI

Chairman

Honorary Treasurer

Council Member

Managing Director, Pacific International Line (Pte) Ltd

Executive Chairman, Cresendas Group

President, Singapore Manufacturing Federation

President, Japanese Chamber of Commerce & Industry, Singapore

2 MR GAUTAM BANERJEE

8 MR PEK LIAN GUAN

14 MR SHANKER IYER

Vice-Chairman

Deputy Honorary Treasurer

Council Member

Chairman, Blackstone Singapore Pte Ltd

Chief Executive Officer, Tiong Seng Holdings Ltd

Immediate Past Chairman, Singapore International Chamber of Commerce

3 MR SHABBIR H. HASSANBHAI

9 DR JA MES ANDR ADE

Vice-Chairman

President, The American Chamber of Commerce, Singapore

Director, Indo Straits Trading Co. (Pte) Ltd

4 MR TANG KIN FEI

Vice-Chairman Group President & CEO, Sembcorp Industries Ltd

5 MR PHILIP NG

Honorary Secretary

Council Member

10 MR M AGNUS BOCKER

Council Member Chief Executive Officer, Singapore Exchange Ltd

11 MR THOM AS CHUA

Council Member

Chief Executive Officer, Far East Organization Pte Ltd

President, Singapore Chinese Chamber of Commerce & Industry

6 MS OLIVIA LUM

12 MS R ACHEL ENG

Deputy Honorary Secretary

Council Member

Executive Chairman & Group CEO, Hyflux Ltd

Joint Managing Partner, WongPartnership LLP

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15 MDM K AY KUOK

Council Member President, Singapore Hotel Association

16 MR GR AHA M LEE

Council Member Immediate Past President, The Australian Chamber of Commerce, Singapore

17 MR STEFANO POLI

Council Member President, European Chamber of Commerce (Singapore)

19 DR R. THEY VENDR AN

Council Member Chairman, Singapore Indian Chamber of Commerce & Industry

20 MR ANDREW TJIOE

Council Member President, Restaurant Association of Singapore

21 MR SA MUEL TSIEN

Council Member Chairman, The Association of Banks in Singapore

22 MR ZAHIDI ABDUL R AHM AN

Council Member President, Singapore Malay Chamber of Commerce & Industry

30/09/2014 17:34

Oct•Nov•Dec 2014

Inside SBF SBF Appreciation Dinner Jun 27, 2013 SBF organised an appreciation dinner for Mr Tony Chew, who stepped down as SBF Chairman after six years. Mr Teo Siong Seng, the new SBF Chairman, delivering a vote of thanks to Mr Chew.

Guests at the appreciation dinner hosted by SBF.

Mr Chew receiving a token of appreciation from Mr Teo.

ASME Appreciation Dinner Jun 24, 2013 The Association of Small and Medium Enterprises (ASME) also organised an appreciation dinner for Mr Tony Chew.

Mr Chew giving a warm welcome to the guests at the ASME dinner. Mr Kurt Wee, President of ASME, presents Mr Chew with a token of appreciation.

The SBF Secretariat with Mr Chew and Mr Bob Tan (bottom right), one of SBF’s outgoing Council Members.

SIM-GE-168-T14 BizQ Quarterly@ft.ai

27/8/14

5:59 pm

Oct•Nov•Dec 2014

Inside SBF Sep 16-19, 2014

11th China-ASEAN Expo and Business and Investment Summit The Singapore Business Federation (SBF) led their largest delegation to the 11th China-ASEAN Expo (CAEXPO) and the 11th China-ASEAN Business and Investment Summit (CABIS); held in Nanning, China, in September. The 260-strong delegation was co-led by SBF Chairman S.S. Teo and Mr Seah Moon Meng, Chairman of IE Singapore and Chairman of SBF’s China Business Group. Singapore was the country of honour at this year’s trade event. A memorandum of understanding (MOU) was signed between SBF and the China Council for the Promotion of International Trade (CCPIT) to establish the China-Singapore Business Council (CSBC).

The Opening Ceremony of the 11th CAEXPO and CABIS. Prime Minister Lee Hsien Loong touring the Singapore Commercial Pavilion at CAEXPO.

SBF Networking Lunch with PM Lee as Guest of Honour. SBF Chairman S.S. Teo and Chairman Jiang Zhengwei of CCPIT inking the MOU of cooperation to establish the CSBC.

SBF Chairman S.S. Teo (left) with Governor Chen Wu of Guangxi Zhaung Autonomous Region.

PM Roundtable Dialogue with PM Lee and six Chinese CEOs.

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Singapore-Guangxi Networking Dinner.

01/10/2014 09:37

Oct•Nov•Dec 2014

International Markets

Singapore, Sri Lanka Renew Business Ties

TOURISM AND LEISURE SRI LANK A IS NOW FAVOUR ABLY SEEN AS AN ATTR ACTIVE INVESTMENT DESTINATION FOR PLAYERS IN THE TOURISM AND LEISURE SECTOR.

BiZQ takes a closer look at infrastructure and investment opportunities in Sri Lanka,, the jjewel in the Indian Ocean.

With tourist arrivals hitting a record high of

650,000 in 2010 THE GOVERNMENT AIMS TO ATTR ACT

2.5 million tourists to Sri Lanka annually by 2016

SPH – The Straits Times

ri Lanka’s strategically located new infrastructure, such as the Hambantota airport and port, make the island an attractive destination for investment by Singapore companies. In addition, the Sri Lankan government has been driving the tourism sector as one of the country’s growth areas. Backed by government support for tourism infrastructure development, Sri Lanka is now favourably seen as an attractive investment destination for players in the tourism and leisure sector. With tourist arrivals hitting a record high of 650,000 in 2010, the

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government aims to attract 2.5 million tourists to Sri Lanka annually by 2016. Singapore is ready to boost bilateral trade and investment ties between the two countries, and the tone for greater engagement was set this April when Singapore’s Minister for Foreign Affairs Mr K Shanmugam made an official visit to Sri Lanka. Both countries also signed a revised Avoidance of Double Taxation Agreement. The minister’s visit was planned against the backdrop of renewed interest from Singapore companies in partnering Sri Lankan companies in the areas

of infrastructure, retail, education and logistics.

Basic building blocks On a visit to Jaffna (located in Sri Lanka’s north), Mr Shanmugam reiterated Singapore’s aim to help the younger generation. He witnessed the inauguration of several projects designed to educate the children living in Jaffna. These included: The Singapore International Foundation’s (SIF) project to enhance competency in the English language by training teachers and librarians to better educate students; A youth resource centre at the Jaffna Public Library where

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students can learn through interactive activities; and A mobile library from Singapore donors who included the Modern Montessori International and the Singapore Ceylon Tamils’ Association. Singapore’s National Library Board also donated more than 10,000 books to the Jaffna Public Library. More than 3,000 students from 40 schools in Jaffna are expected to benefit from these projects. To date, Singapore and Sri Lanka have been involved in several joint projects. For instance, some 2,000 Sri Lankan civil servants were trained under the Singapore Cooperation

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30/09/2014 16:12

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involving successful Singapore companies operating in Sri Lanka. This was the first of its kind between chambers from both countries in an effort to connect with various trade organisations to benefit its members.

Prima stays through thick and thin One homegrown Singapore company that is part of the Sri Lankan fabric is Prima Flour. The company remains one of the republic’s flag

bearers in Sri Lanka since it first set up a flour mill in Singapore in 1961. The company said it continued to maintain active operations in Sri Lanka despite the civil war. It has a factory in Trincomalee which houses a fully automated milling complex with its own research and development department, and the Prima Baking Training Centre which was set up in 2004 in Colombo to develop the local baking trade. Another recent set-

up is Prima Ceylon Machinery; the goal of this latest investment is to provide Sri Lankan bakers with access to modern machinery that meets international standards. This new division will also provide technical and maintenance services. The company is so entrenched in Sri Lanka that it has diversified its business to include a restaurant outlet known as Prima Taste Restaurant as well as setting up Prima Management Services.

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IMF: Sri Lanka Exceeds Growth Expectations In its latest review of Sri Lanka in the second quarter of this year, the International Monetary Fund (IMF) said that the country has exceeded growth expectations in 2013. Mission leader Todd Schneider said recently that “the near-term outlook appears positive, aided by a recovery in advanced economies.” He said this after meeting with several government and central bank officials. He explained that real growth is projected “at around 7% and inflation [is expected] to remain close to current rates in 2014. Strong export growth is likely to continue, and may facilitate a further reduction of the external current account deficit – leaving room for

additional accumulation of international reserves by the central bank.” Given the low inflation and moderate private sector credit growth, he said that the current supportive monetary policy was appropriate and that changes in the policy rates have also “brought about a welcome reduction of lending rates.” However, Schneider also noted that “given strong growth and the long lags involved in the operation of monetary policy, a continued forward looking approach to monetary policy is needed together with close monitoring of possible price pressures.” Observing that ongoing financial sector consolidation offers a good opportunity to

improve the system, Schneider said that restructuring operations would be key to achieving efficiency gains. “It would be important to ensure that mergers are accompanied by continued progress on corporate governance,” he explained. “Identifying and mitigating risk factors which may limit potential efficiency gains both during and after the implementation process will be key to creating a financial system that is efficient, profitable, and best serves the needs of a growing economy.” The mission reported that the country has been resilient to tapering pressures and is likely to remain so this year.

SPH – The Business Times

Programme in a broad range of fields from urban planning to water management. SIF is also involved in a programme to enhance healthcare education in Colombo. Business chambers from both countries echoed their support recently in terms of moving bilateral cooperation forward. In mid-August, the 17th Annual General Meeting of the Sri Lanka-Singapore Business Council (SLSBC) was held in Colombo. The council was inaugurated in August 1997 and was established under the aegis of the Ceylon Chamber of Commerce, an institution with a history of over 174 years. Its main goal is to optimise opportunities for bilateral trade, investment, joint ventures, services and tourism between Singapore and Sri Lanka. At the August meeting, SLSBC’s President of the Council, Mr Shamil Mendis, said that much had been achieved between the two countries over the last two years. These included a business mission comprising a 15-member delegation to Singapore this June which was organised to coincide with the IE SingaporeSingapore Business Federation Seminar, “Doing Business in Sri Lanka”. There were also business facilitation meetings for members of the council on various occasions with International Enterprise (IE) Singapore and collaboration with the Japan External Trade Organization (JETRO) to conduct a survey

30/09/2014 16:12

Oct•Nov•Dec 2014

International Markets

Investing in the Netherlands More than 80 Singapore companies are leveraging their European base.

he Netherlands has become the most attractive country in Western Europe for foreign investment. In a recent findings by KPMG’s latest Competitive Alternatives survey, companies starting up in different parts of Europe reported that the Netherlands, followed by the United Kingdom and France, had the lowest international business location costs. For foreign companies looking to establish a presence in the Netherlands as a strategic European base, the Netherlands Foreign Investment Agency (NFIA) is the first port of call. This unit of the Dutch Ministry of Economic Affairs, Agriculture and Innovation assists companies by providing advice, information and access to a broad network of business partners and government institutions. Its services include preliminary inperson meetings to explore investment opportunities, personal guidance on tax, legal and labour issues, introductions to Dutch networks and service suppliers, and customised fact-finding trips in cooperation with its regional network. In a recent interview with BiZQ, NFIA’s Executive Director for Southeast Asia, Suzanne Sweerman, shared

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her views on the trade and investment opportunities in the country.

Ms Suzanne Sweerman, NFIA’s Executive Director for Southeast Asia

What are your views on the current level of trade and investment between the Netherlands and Singapore?

Investments from Singapore are growing and there are several reasons for the growth. Singapore industries are maturing and globalising, and more companies that are operating on a worldwide scale choose to include Europe. The Netherlands is a good base in Europe due to three key factors: great logistics infrastructure, a competitive tax structure and a highly educated and multi-cultural workforce.

We are seeing more foreign companies who have made the Netherlands their European headquarters, distribution centre or their main marketing and sales office in Europe. In addition, the European Union (EU)-Singapore Free Trade Agreement (EUSFTA), which will come into force soon, will boost trade between EU countries and Singapore. Under this agreement, the EU will eliminate tariffs on all imports from Singapore over a period of five years, and 80% of the tariff lines will be covered upon entry into force of the agreement. The removal of such tarriffs will benefit Singapore exporters of electronics, pharmaceuticals, chemicals and processed food products. Singapore will grant immediate duty-free access for all imports from the EU. What are some of the key factors that have made entry into the Dutch market easier for many Singapore businesses? The latest World Economic Forum’s Europe 2020 Competitiveness Report ranked the Netherlands third overall in the EU for: outstanding use of information and communications technology (ICT); education, social

inclusion, and effective government policies; and building a smarter and more inclusive society. KPMG’s latest Competitive Alternatives survey also revealed that the Netherlands owed its top ranking (for having the lowest international business location costs in Western Europe) to: A low business tax rate and competitive government incentives for R&D activities; Stable facility and utility costs in both suburban and city centre office space; The best environment for hiring skilled workers (less than 10% of employers reported difficulties in filling skilled job vacancies); The best access to high quality ICT infrastructure.

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What are some of the attractive investment sectors which would benefit from private innovation and business cooperation? The innovation climate in the Netherlands is driving much of the competitiveness. Sectors such as agri-food, logistics, high tech materials, ICT, data centres and HQ operations are currently attracting a significant amount of investment. Much of the Dutch government’s previous efforts have been put into developing and implementing policies to stimulate private innovation and cooperation between business, research institutes and government.

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For more information on investment opportunities in the Netherlands, visit www.nfia-singapore.com.

30/09/2014 16:12

SME Resources

Call for SMEs to e-File their Taxes Simplified tax return Form C-S is aimed at qualifying small companies.

INLAND REVENUE AUTHORITY

or those that do not meet Form C-S eligibility conditions will need to file Form C together with their financial accounts, tax computations and supporting schedules by Nov 30, 2014. Companies who have not received any notification from IRAS but have commenced business in 2013 have to complete and submit the form “Request for Income

Tax Return (Form C/Form C-S) and Notification of New Accounting YearEnd” via the IRAS website (www.iras.gov.sg).

SME Workshops

lead, manage and cope with changes in their organisations. Participants will learn to identify specific actions that enable them to develop healthy responses to changes, deal with resistance, and communicate changes effectively using verbal and non-verbal skills.

Building the Resilient and Harmonious Workplace Nov 26 Singapore Business Federation

Singapore recognises that small companies face greater challenges in managing their tax obligations. Their resources are already highly stretched, and they struggle just to keep up with their day-to-day operations and focus on business viability. In order to reduce the compliance burden for small firms, the Inland Revenue Authority of Singapore (IRAS) has simplified the tax filing process for small companies through Form C-S. Small companies with an annual revenue of S$1 million or below and who have met certain qualifying conditions may use Form C-S, instead of Form C which is meant for larger companies, to declare their income. Small companies that file Form C-S do not need to submit their

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financial statements and tax computations. However, they are still required to retain and submit these documents upon request. IRAS encourages companies to e-file their Form C-S at its myTax Portal to enjoy a range of benefits, including an extended filing due date and instant acknowledgement upon having successfully e-filed. SMEs need to file their corporate income tax return by Nov 30, 2014 as they would have received Form C or a notification package to e-file Form C-S, even if no business was done this year. SMEs that e-file Form C-S via the myTax portal can submit their filing by Dec 15 instead of Nov 30. Larger companies with annual revenue exceeding S$1 million

Companies need to deal with an increasingly diverse workforce with employees of different nationalities, cultures and beliefs. SBF, the Ministry of Manpower’s Community Engagement Programme (CEP) Secretariat and the Tripartite partners are organising this workshop to help employers and employees connect better, and change the way they communicate in the workplace. www.sbf.org.sg

How to Manage Change and Turn Challenges into Opportunities Dec 2 Singapore Business Federation

This training workshop by SBF is designed for leaders, managers and executives who want to

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For more tax filing tips and details on tax saving schemes, please visit IRAS’ website at iras.gov.sg – Businesses > For Companies > Filing Income Tax Return Form (Form C/ Form C-S) > Tips for SMEs on Form C/Form C-S Filing.

www.sbf.org.sg

Understanding Procurement Fraud Schemes Dec 9 Singapore Business Federation

Procurement fraud is believed to be one of the most common and costly financial crimes. The SBF Business Institute is organising a training programme designed to help participants understand procurement fraud better and develop a more effective strategy to prevent and detect fraud in their organisations. www.sbf.org.sg

02/10/2014 13:32

Oct•Nov•Dec 2014

SME Resources

Business Community Shows Strong Support for NS

Upcoming Events

First ACCORD council meeting reflects interest in collaboration.

The SBF Sustainable Development Business Group (SDBG) is organising a Singapore Pavilion at the Green Innovation Expo 2014 at Tokyo Big Sight in Tokyo, Japan. This event is expected to attract about 25,000 decision makers and professionals including Japanese and foreign government officials, C-suite executives, environmental preservation experts and researchers in water production. The Green Innovation Expo is an international event that is focused on energy-saving and environmental measures, water treatment and green materials – fields in which Japan has high technological capabilities.

Second Minister for Defence Mr Chan Chun Sing and Executive Chairman of Asia Resource Corporation Mr Tony Chew cochaired the inaugural Advisory Council on Community Relations in Defence (ACCORD) Employer and Business (E&B) Council meeting in September. The Council, which comprises leaders from different sectors of the business community, reflected the strong support from employers and businesses for National Service (NS). Commenting on the importance of the council, Mr Chew said that as a result of manpower shortages, opportunities arose for more collaborative efforts between MINDEF and the business community. Mr Chew said: “The E&B Council provides a platform for employers and businesses to discuss topics like SME challenges, the recognition of NS training, skills and personal developments, as well as the collaboration and sharing of best practices between the business community and MINDEF and the SAF.” “NS is an important and integral part of Singapore’s defence,” he added. “We

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are participating in the E&B Council because we believe that our input and recommendations can improve the support and integration between the business community and National Servicemen (NSmen).” The council members, comprising experts from the relevant industries, will form three working groups to look into three broad areas: Identifying the challenges that SMEs face in supporting NS, recognising NS training, skills and personal development, and the possible areas of collaboration between the business community and MINDEF and the Singapore Armed Forces (SAF). Mr Thomas Chua, President of the Singapore Chinese Chamber of Commerce and Industry (SCCCI) explained that identifying the challenges that SMEs face

Green Innovation Expo 2014 Nov 12-14 Tokyo, Japan

supporting NS, coupled with exploring possible areas of collaboration between the business community and MINDEF and the SAF, could result in expanded resources. He said: “Many SMEs face challenges in resources amid this period of economic restructuring. There exists immense opportunities for the business community to work with MINDEF and the SAF to train NSmen with the right skills, and match them with the companies to plug the SME capabilities gap and manpower needs.” The ACCORD E&B Council is one of three councils formed after the restructuring of ACCORD, and serves as a platform for better engagement of the business community on NS issues, as well as to strengthen collaboration between the community and MINDEF and the SAF.

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For more information, visit www.jma.or.jp/green/en/.

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