by Chris Kuan
The global transport industry is truly in a dire state when a global search for the next SMRT CEO ends with someone with zero experience in the transport industry, zero experience working in the private sector and zero experience at board level of any company let alone a $1b company.
But it goes further. If SMRT is a fully privatized company, would shareholders particularly the asset managers be happy with such a CEO who is practically indistinguishable from the previous CEO? The answer would surely be no, in particular why change the CEO at all if his replacement is almost exactly the same? But worse because the new man does not have the 5-year experience of the former CEO’s tenure.
Normal investors and shareholders usually do not like the discontinuity or disruption at the top of the company for no new directions. Of course, we do know that the indirectly state-owned SMRT is not like a normal private sector company although it was supposed to be managed like one or so we were told.
Any shareholder and that include Temasek ought not be pleased with this but remember the government and the sovereign wealth funds themselves make a big song and dance about how “operationally independent” and “arms length” they are from the government. This SMRT appointment simply goes to show corporate governance and all those nice sounding words like “operational independence” and “best practice” are just embellishments. If things don’t turn out right, there is always a bail out in the form of fares hikes. Of course, it is certainly within the state’s prerogative to do whatever it wishes with the GLCs but just spare us the bullshit.