TR EMERITUS

By Bhasakaran K, Political Correspondent

On 21 July, Temasek Holdings released a statement regarding the departure of Mr Charles ‘Chip’ Goodyear as CEO of the company. He was to have assumed the position completely by October 2009 after coming in as CEO Designate in March.

Mr Goodyear’s succession to Ms Ho Ching was announced just earlier this year in February and naturally the appointment got the attention of not just Singaporeans but the global media as well.

That in part was due to Mr Goodyear’s return from retirement and the amount of coverage Temasek Holdings had already received in the previous years, primarily, due to the fall out of the ill fated venture in Thailand with Shin Corp. Which of course proved to be the catalyst for the fall of PM Thaksin Shinawatra and had Thailand in a state of political turmoil that would only show signs of abating recently.

Now with Mr Goodyear’s departure hogging headlines, perhaps the scenario could have been avoided in the first place. It is hardly on par with the negativity that came with the Shin Corp saga but it would have been one less chip (no pun intended) on Temasek Holding’s reputation and image.

With reports dating Mr Goodyear being scouted as far back as 2007, it is certain that Temasek Holdings did have cautious consideration over its succession plans and as a pivotal financial monolith it would have placed great emphasis and effort on the headhunting process. But somehow a much more thorough vetting should have been in place that of course would have included a check on the business and strategical ideologies of the candidate; the very reason that has been quoted for the departure of Mr Goodyear.

This I believe is a key standard of evaluation for any high profile appointment especially if the candidate is expected to take the reins of the organisation. To ensure the organisation and its appointed leader are in synchrony in goals and aspirations should be the minimum criteria expected.

The question that arises is if enough attention to detail was given in the appointment or was it made on cursory judgments of Mr Goodyear’s sound reputation and mining background, the industry that Temasek Holdings is hoping to establish itself in or perhaps it was simply rushed given the unwarranted attention from the fall out of the investment in Shin Corp.

Another unnecessary problem is the potential cost incurred from the bailed appointment and any reimbursement package that might be in place. Apart from that, the exact details of the strategic differences have not been disclosed, though several reports have made speculations. But what it only does is add to the uncertainty of a peculiar scenario.

The credibility of Temasek Holdings is sound and is one of the few firms in the world to receive the highest corporate credit rating of AAA/Aaa from Standard & Poor and Moody respectively and this is no small feat. A change in high profile positions is not an uncommon practice but for an appointee to leave even before taking full office does not reflect well.

How will the incident reflect internationally, especially when taking into account the authoritarian image that Singapore already holds? Would the incident now discourage or at the very least put Temasek at a disadvantage in wooing other higher profile foreign candidates?

With Ms Ho Ching now continuing her role as CEO, it brings to mind the statements made by Mr Dhanabalan and Ms Ho Ching in February. Speculation over Ms Ho Ching’s performance as the reason for the change was brushed aside and the reason given by Mr Dhanabalan for the change was, “The team has already embarked on a different stance since mid-2007, and has begun to review its long-term plans under various scenarios prompted by the economic downturn. The board is of the view that, if we are to bring in new leadership, it would be as good a time as any to involve a new leader in this review.”

Ms Ho Ching also said of her resignation from the board, ‘I’d like to think that whoever is the CEO would like to have maximum space without having to ask if this is somebody’s pet project; it is a wise thing for a departing CEO not to hang around on the board.’

What it does is leave cynics with room to question the whole process in the first place, with Mr Goodyear ironically leaving for reasons rather similar to the statement above.

Ms Ho Ching is expected to carry on while Temasek’s annual leadership renewal is still carried out and her appointment may very well be short term, while a replacement is sought. However given the time needed to seek out a new candidate and the need to reestablish investor confidence, it is more likely that Ms Ho Ching could be in the saddle for much longer.

The return of Ms Ho Ching makes sound fiscal sense in the short term but it goes against the reasons for a change as given by Mr Dhanabalan in February. Part of that reason had also been seen as a need by the investment firm to break away from its image as a subsidiary of the Singapore government.

The appointment of a foreign CEO would have provided a boost in the shift towards a more global image for Temasek Holdings, especially when taking into account the firm’s plans to expand the majority of its portfolio out of Singapore. But this is in stark contrast with the continuation of Ms Ho Ching as CEO.

At the heart of the matter, the issue over Mr Goodyear’s departure could simply just be due to a complete lack of synchrony between our unique brand of business practice and initiatives and that practiced conventionally in foreign markets and of familiarity to Mr Goodyear.

To note, only two members of the board of directors are foreign. In that aspect, a local candidate or someone already present on the board would have been a better choice. But with full disclosure over the reasons not forthcoming we may never know for sure. It would be interesting to see what the long term plans for Temasek Holdings will be but as mentioned the priority now lies in reestablishing investor confidence in an already uncertain economic climate.

Other articles by Bhaskaran K:

>> Changes in political system to allow more alternative voices in Parliament

>> A look at the new batch of NMPs

5 Responses to “The untimely departure of Chip Goodyear”