Andrew Loh
Anyone expecting Temasek Holdings to shed further light on the departure of Mr Charles Goodyear will be disappointed. Don’t hold your breath. Despite calls for more transparency and openness in its dealings, the state sovereign wealth fund (SWF) is notoriously secretive.
Singaporeans will be left to speculate on the reasons for the sudden and unexpected exit of Mr Goodyear.
Having said that, lets take a look at the selection process adopted by Temasek through which it appointed Mr Goodyear to take over Ms Ho Ching, wife of Prime Minister Lee Hsien Loong, as Chief Executive from October 1st.
In the Parliamentary sitting of 4 March 2009, then-second Minister for Finance, Mrs Lim Hwee Hua, stoutly defended Mr Goodyear’s appointment. She explained how Mr Goodyear came to be offered the position of CEO of Temasek:
Mr Charles Goodyear was identified and approached by the Temasek Board as a potential CEO candidate in 2007. Once he agreed to be considered as a CEO candidate, Mr Goodyear was interviewed by the Board members, individually and as a group. The Board engaged with him for over a year before it finalised its decision. Temasek picked Mr Goodyear as its next CEO because its Board assessed that he was the best person for the job, based on merit…. The Board was also satisfied that he shares Temasek’s values and is committed to building long-term sustainable value.
As Temasek is a Fifth-Schedule Company under the Singapore Constitution, Mr Goodyear’s appointment both as a Board member and as a CEO successor was subject to the concurrence of the President. Cabinet first discussed the Temasek Board’s nomination of Mr Goodyear. Cabinet decided that the Government should have no objection to Temasek appointing a foreigner as CEO if he was assessed by the Board to be suitable and the best candidate available. Cabinet, therefore, endorsed Mr Goodyear’s nomination, but also reaffirmed the need for the Board of Temasek to remain in the effective control of Singaporeans.
Temasek Board’s recommendation was then put to the President for approval, and the President met Mr Goodyear before giving his concurrence. (Parliament)
So, the president, the cabinet and Temasek’s Board of Directors all had a hand in assessing and approving the appointment of Mr Goodyear over an extended period of time. He was identified as a potential CEO in 2007 – two years before he was offered and took up the job in March 2009.
In its news release on 6 February 2009, where Temasek announced Mr Goodyear’s appointment, its chairman, Mr S Dhanabalan, said: “Ho Ching has been instrumental in bringing Chip on board. We have been working on this appointment for more than a year.” (Temasek website)
Less than three months before he was to replace Ms Ho Ching as CEO, Temasek announces Mr Goodyear will no longer be its CEO come October 1st – and that Ms Ho Ching will continue as its chief. The problems seem to have started immediately after Mr Goodyear was designated as the new Temasek CEO. According to the Associated Press, “Goodyear… had been working alongside outgoing chief executive Ho Ching since March.” One would imagine that in the four months since, the two may not have got along as well as what has been reported.
So, what happened?
The reason given by Temasek in its news release of 21 July 2009 said that “there are differences regarding certain strategic issues that could not be resolved.” However, this runs counter to what Minister Lim had said, that Goodyear “shares the values of Temasek and its position as a long-term investor committed to delivering sustainable returns.”
It therefore raises the question: Did not the president, the cabinet, Ms Ho Ching and the BOA of Temasek ask Mr Goodyear about his strategy for Temasek before appointing him as CEO? And what does Temasek mean by “strategic issues? Did not Minister Lim say Goodyear “shares… the values” and its long-term position?
More curiously, on 21 July, Ms Ho Ching said: “I am sorry he is unable to continue with the leadership transition, and hope to complete the initiatives that he has started.”
If Temasek cannot reconcile Mr Goodyear’s ideas on “strategic issues” with its own, why is Ms Ho Ching going to “complete the initiatives” which Goodyear started? What are these initiatives? And how sure is Temasek that Ms Ho Ching is up to the tasks, given that she herself admitted, in February, that “Chip brings capabilities that I don’t have”? (Straits Times)
So, is there more to Mr Goodyear’s departure than meets the eye?
The New York Times:
“This is not good news for Temasek,” said Carl Linaburg, co-founder of the Sovereign Wealth Fund Institute in Roseville, Calif., which tracks data on the investment funds. “Prior to Chip’s arrival, Ho Ching had been widely criticized for Temasek’s major losses in financials. Chip’s departure makes people wonder why Temasek can’t seem to make firm decisions with sound judgment, which is essential for managing the assets of a country.”
Some have suggested that it is a clash of culture – according to the Financial Times (FT):
“… there has been intense speculation since Mr Goodyear’s appointment was announced about how he would deal with Temasek’s senior management, and the close-knit community of Singapore business executives in charge of the Temasek-owned companies that dominate the city-state’s corporate landscape. These include Singapore Airlines, Singapore Telecommunications and DBS Bank.
Many observers said that Mr Goodyear might encounter a culture clash if he attempted to shake up the management of Temasek and its affiliated companies.”
The FT also reported that “Nomura Securities, in a recent research report, suggested that Mr Goodyear might increase Temasek’s borrowings to make new acquisitions in an effort to rebalance its portfolio. Such a move would have been a break with Temasek’s conservative cash management.”
We will probably never know the true reasons for Goodyear’s departure. But perhaps that is not the real or important question we should ask. What should be of concern to Singaporeans is the process of selection adopted by Temasek and the seemingly rubber-stamp approval which the president and cabinet gives to Temasek’s actions. This is especially important given that Temasek guards and invests billions of dollars which belong to Singaporeans, which have resulted in monstrous losses in the past year or so.
Another important point to note is the question raised by Workers’ Party chairman, Ms Sylvia Lim, in Parliament in March. She had asked why the hiring practice of the Civil Service, which restricts access to state secrets to Singaporeans, was not applied to Temasek Holdings. (Parliament)
In her reply, Minister Lim said, “Temasek is not part of the Civil Service or the public sector. It is a commercial company that is wholly-owned by Government.” Turning to Mr Goodyear’s appointment, Minister Lim said, “As Temasek CEO, Mr Goodyear would be privy to information about the company’s operations.” Her only defence regarding the question of keeping state secrets to Singaporeans was that Mr Goodyear is bound by the Official Secrets Act (OSA). But as the WP chairman said, what good is the OSA given the fact that Mr Goodyear may leave and never return to Singapore? “Does the OSA really help us?” asked Ms Lim.
Minister Mentor Lee Kuan Yew has always rejected calls for Singapore’s two sovereign wealth funds – Temasek and the Government of Singapore Investment Corporation (GIC) – to reveal its investments. Indeed, in a letter to the Wall Street Journal on 27 June 2007, the press secretary to the Prime Minister said “it is not in Singapore’s interest to publish the details or reveal their size.” (Wall Street journal)
Mr Goodyear, now no longer taking up the CEO position, has such confidential information about Temasek’s investment strategy, as Minister Lim Hwee Hua admitted in her parliamentary reply.
How will the government ensure that this is not used to compromise Temasek’s investment strategy, besides relying on the OSA, which may be useless anyway?
‘We hired the best,” MM Lee said in June, referring to Mr Goodyear. (Source)
While Mr Goodyear’s credentials may indeed be impeccable, perhaps the more important question lies with the selection process itself. Clearly, despite having been intensely interviewed by the president, the cabinet, the BOA of Temasek and Ms Ho Ching herself, the exit of Mr Goodyear has shown that the selection process has flaws.
And the flaw seem to be a fundamental one – the selection process failed to determine Mr Goodyear’s stand on “strategic issues” which Temasek now says is the reason why he will no longer be chief.
As blogger Lucky Tan put it:
“Gee, nobody bothered to ask him about what his strategies were and his views on key issues when he was interviewed for the job? Is that how we hire people to manage billions of tax payers’ money?”
—-
HELP keep the voice of TOC alive!
If you like this article, please consider a small donation to help theonlinecitizen.com stay alive. Please note that we can only accept donations from Singaporeans. Thank you for your assistance.Do you have a flair for writing? Volunteer with us. Email us your full name and contact details to theonlinecitizen@gmail.com
Be prepared to be poorer and poorer and more poor
as the goodyears are gone and the bad years are
back with us!
Who in charge also no use, our Cpf money all go into the drain liao !!!
1 year later, things would have come to pass and few will remember or talk about it. talk may go round for a week or two, maybe a month, but after that, people move on and this will be forgotten. That’s the strategy….ha ha ha
It is more likely that Goodyear wanted out. Perhaps in the last few months, he saw something rotten in the state of Temasek, which he didn’t want to be made the fall guy for.
First they say they found the right man–GOODYEAR. Then they say GOODYEAR is not a GOODYEAR after all. They say he cant get along. maybe he found out about a lot of hanky panky stuff going on in temasek !!
And before he masak the temasek they better get rid of him! But one wonders if the CEO of Temasek was anyone else but Ho Ching whether she will still be around. Its funny when you are related to the PM and Lee dynasty you can do no wrong, And if you do you just get a slap on your hand with a “don’t do it again!
And okay u get to keep your old job as CEO but promise you wont screw up again. Welcome to Singapores one and only party family “PAP”.
C.hip
I.s
A.merican
On one side, you can say the selection process failed. However, if you look at it from the other side, Goodyear probably could have done his homework better. In the past 10 years, there must be more than a few foreigners that were hired to work in the senior management of big companies here. He could have played a round of golf with them, have lunch, a few drinks, and chatted over the culture and style of working with local management, scholars, old guard, etc. If he had done that thoroughly, he would have been armed with more info and knowledge enabling him to make a informed decision. Maybe he did, we don’t know. But that’s what a wise senior executive of his calibre would do.
When somethings cXXk up, they need a scapegoat. When times get a lil better, the responsible culprit comes back to sit on the throne again. These are the people that’s not to be trusted when times are bad. : P Just cant wait for the election to vote again. Yeah!!!
I am disappointed with the selection process.
By this, I am not saying who is wrong or right.
I am simply disappointed.
that all.
53) Gerald Giam on July 22nd, 2009 10.04 pm
[[[ It is more likely that Goodyear wanted out. Perhaps in the last few months, he saw something rotten in the state of Temasek, which he didn’t want to be made the fall guy for.]]]]
Well as long as the People, that means you included, accept, what is the need to demand what is exactly the reason?
Which singaporean is not happy?
I see none. I see singaporeans willing to Trust.
Me included. I am so proud.
Goodyear left cos:
- he uncovered too many misdeeds and wrongdoings in TH – do not want to end up getting the shit
- he came up against a huge and impenetrable wall – with Empress Dowager, her father-in-law and husband behind it
- just a CEO in name – same like Prata-man – a puppet employed to say “yes” and to conform
Kelong! Farcical! Wayang! Totally inefficient! Absolute disgrace!
It’s not easy during the goodyear or badyear to find a candidate to meet Temasek’s expectations and yet still without any conflict with MIWs’ interest.
Kudos to Andrew Loh for this well presented article.
Logical questions and logical assessments. Top rate.
Does HC only have one blouse?
And has she got a wardrobe like Ronald McDonald
I alway see her wearing the same thing
As the day for hand-over near, the realisation of falling from “one of the world’s most powerful women” into a house-wife hits.
MM & SM are examples in Singapore where it is difficult to give up power completely.
We can guess all we want why Charlie left, but the PAP under LKY is laughing at you guys. No responsibility, no need to account to anyone.
The clowns in TH is turning it into a circus but no one is laughing except for the PAP jokers who manage to return to parliament with a two-thirds majority to screw the very people who voted for them.
How silly can Singaporeans be.
64) ram
Desperate housewife?
Oh Dear Mother of Singapore,
Please wake up….
Your daughter in law is really up………..
Bloody joke.
Pay a whole cabinet a couple of millions and they still get it wrong despite having a combined effort in the selection process.
Ridiculous.
I think I’m more inclined to agree with the idea that Chip must have realised that he was not actually joining a business but a club of certain people. If you look at Chip’s record outside Temasek, the guy actually had quite a good record in running things and even at turning things around and boy, could Temasek do with a bit of turning around.
I could be cynical here but I think this was a case where the powers that be wanted to look like they were actually putting a qualified person in place but then deposing of him when he actually tried to do something serious like run the fund.
We have this strange definition of qualified in Singapore. It’s not always about the person who is qualified to do the job but the person who will fit an imaginary profile of what some layabout bureaucrat calls good.
One of the biggest jokes was in the SAF where we sent General Tan Huck Ghim to command a UN force in Timor Leste. The guy did a good job and was recognised internationally. When you consider the SAF has never gone to war, General Tan was the only soldier in the whole place who had anything close to “real” experience – was he qualified to lead the SAF and transmit his experiences down the line? – Definitely – but what happened – he came back to Singapore and we took away his extra star because as one MINDEF baby said – “He’s Old.”
So when you look at things this way, are you surprised Chip ended up resigning?
Did you see how the Straits Times has just dropped this story from the ‘Most Popular’ stories to read at the right hand column on its website? It was there as ‘Most Popular’ yesterday and today it is gone. Unusual and not unexpected.
The govt seems to get worse with each passing month. The hiccups seem to be destined for a major transformation of our political landscape in preparation for the next election. Do I smell an upset here?
First, we have a terrorist that ran away while limping and the minister in charge got away by saying an awkward sorry. His sub ordinates got removed while he stayed on in his multi million job. Only Singapore can do that…things also get worse after that.
Next, the government invested our hard earned bloood money they collected from common folks via the town council mode and lost a few million dollars. The official escaped again by saying that it is merely less than 1 percent of the total reserve of close to 2 billion dollars. Only Singapore can do that…
Thirdly, the government decided (by one man only) that there will be two IRs now and not one to capitalise on the high revenue gambling business. Now, the casinoes are delayed due to lack of construction materials and maybe cash inflow. The top guy escaped explaining that business sentiment is bad and still gets to keep his 3-million dollar job per year. Only Singapore can do that…
Fourthly, businesses from construction to education all cheated their way unethically due to lax labour legislation and the minister says that he will look into it. The minister escaped again and keeps his million dollar job. Only Singapore can do that…
Fifthly, during a Presidential election process, a candidate can be mocked and bullied gangster-like until he has to give up the candidacy. The Old Man still reigns supreme in a democratic country. Only Singapore can do that…
The list goes on and it makes me sick…
According to a Reuters report Chip ” Goodyear’s decision to leave likely was made after a board meeting last week when he put in a list of proposals and changes he wanted to make after taking the helm on Oct. 1, sources with knowledge of the meeting told Reuters. But the proposals ran into trouble with the board, the sources said.” See link below for Temasek’s Plan B after Chip leaves :
http://www.mineweb.net/mineweb/view/mineweb/en/page67?oid=86600&sn=Detail
Really a bloody joke!! One year of engagement with Goodyear and the TH BOD did not realise that he has a different strategy from them? Come on!!!
I am very very disapointed in this episode.
@40) Disbelief on July 22nd, 2009 7.22 pm
I tend to agree with #40), that maybe we shouldn’t believe what was presented to the public & run off in tangents speculating this and that. After all, when a person leave a post, when did mgt ever reveal the true reasons? “Unresolved strategic differences”?, C’mon, every low-grade to high-grade exec that leave can have this generic reason – meaning anywhere from non-performance to unable to wipe the boss’ ass.
Now to contradict myself in speculating….
Situation = TH lost big time, some deals can’t be swept under carpet, people calling for heads to roll.
What to do = Why fight the wave? Just give people what they want – a head. Use the good old fullfilling a prophesy tactic.
HOw = get a top-hotch honcho. Even blow trumpets for this person, the louder the better, blah, blah. While he is settling in, it buys time for the incumbent (note: never did indicated of resigning, just another person has been brought in). See case of LBW in STTA case – Singaporeans tend to lose interest after letting out steam then they LBBL. Then pull rug from under the old boy – undermine his authority, move OBs, move his chair next to toilet, etc… Golden handshake as planned, chop-chop a head for the people. Then people are confused, thinking that running TH is truly complex & diverse that a really brilliant genius (par Einstein) must be at helm, not just a proven world-class guy. But where to find this godly person? Ta, da… presents the incumbent, the “I told you so/all along” routine.
COnclusion = Staged a roundabout wayang show costing probably some $m (props, severance package?, etc.) which is small fish to $b lost in first place. Princess is saved, people eat the dust. Move on.
Poor Mr Chips Gdyr. Like Lehman Bro case, question is whether he went in fully informed, or the “product” was deliberately mis-sold to him from the start. We should see true story in 12-24 mths time – whether another person truly displaced HC permanently. S’poreans, don’t forget, hah. (Maybe they could get the person leading the Norwegian SWL).
Many angmoes who came to Singapore as CEOs, appeared to have made piles; multi million SIN Dollars that is, within a short time of their tenure. Most got rewarded handsomely with severrance packages.
And the funny thing is that most of these angmoes are found not up to expectations, are they that incompetent ?
Don’t forget the 4 months of top-tier remuneration that Chip-off has enjoyed guys…
It may have been an honest mistake – i.e. hiring a highly-capable guy but no fit with the organisation, but as a taxpayer, I want to know how Temasek Holdings is going to account for the (probably) substantial salary + costs that have been thrown down the drain. Why should taxpayers have to absorb this particular loss?
It may be valid to say investments are inherently unpredictable but hiring someone over a 2-year period, then allowing a transition phase for 4 months to lapse before calling it off smacks of incompetency – at the very least.
Shouldn’t MOF file a law suit to claim damages since a lot of money and time was wasted over a 2 year period. Since obviously MOF is not going to sue Temasek Holdings, can we file a class-action law suit against Temasek Holdings since it is an ‘independent financial institution’?
Even if Mr Goodyear decided not to take up the CEO appointment, then why is it returned to Ho Ching? Don’t tell me there’s no more potential candidates except that old lady?
In speculation, perhaps the Uniquely Singaporean mentality that (only) one man makes a difference was applied in this case and everyone expected Mr Goodyear to come in and use the existing (mediocre?) team at Temasek Holdings to work his magic.
So, when he would have (naturally) suggested that he needs to bring in key people who are going to execute his strategy, the people at Temasek Holdings would have all started scratching their heads and telling him ‘no need’ (i.e. cannot). This may have frustrated him and left him with the choice between walking away or working with the existing (mediocre?) team and taking the blame for their (poor) performance.
If that had been truly the case, then obviously he is very capable as any other imcompetent incumbent would have just ‘shaked head’ and carried on in the comfy and financially-rewarding position (i.e. Singapore-style of seizing the opportunity).
Well written by Andrew Loh.
I like your article which asks pertinent questions most singaporeans simply ignore BY CHOICE. I mean those Apathetic but highly educated ones where education has no bearing on success in life.
And the MSM recently splashed a news that singapore is #1 on corporate governance. Let me assume that this is pure coincidence only.
@74) theforgottongeneration on July 23rd, 2009 8.28 am
Errata: last part – “…S’poreans, don’t forget, hah. (Maybe they could get the person leading the Norwegian SWL).”
Should be SWF not SWL!
TODAY quoted excerpts from a WSJ article:
“….Mr. Goodyear pushed to instill a tighter sense of discipline within the company, say people at Temasek. People who didn’t show up on time for internal meetings were fined for each minute they were late, they say.”
TODAY seeks to protect our ruling elites’ public image by citing half-truths and project the mistaken impression that Goodyear was “rigid with rules”.
WSJ also reported:
“Typing messages on BlackBerrys during meetings was prohibited. Attendees at meetings were pressed to defend their positions on investments in front of their peers, something few were used to doing.”
The above was not printed by TODAY. I can understand why becos the above (especially the 2nd sentence) is quite damaging to tamasek’s reputation.
15) Let’s be reasonable on July 22nd, 2009 2.31 pm
#I suspect he has to step down becos HC cannot get an equally remunerative and high profile job elsewhere. Maybe our rulers think that the Lesser Mortals have fogotten the hugh losses suffered by tamasek.#
I think you hit the nail on the head! Must have learned from brother-in-law’s experience (though to ordinary mortals, he isn’t doing too badly – still being paid millions for part-time job)
Chip has probably taken a lesson from Steven Hu (Oz sales exec arrested in China) in regards to corporate dealings with secretive goverments and state corporations. He’ll keep his pie hole shut as long as there is a risk of arrest. The Lee monarchy will do anything to save face.
Also, a CEO has to have the freedom to appoint his own team.
http://business.smh.com.au/business/the-adviser-they-didnt-have-to-have-20090722-dtk5.html
To sum up in one sentence:
“Goodyear is like a english chess Emperor on a Chinese chess set; to make things worst he is in a different color with the same side”.
“Ka Ki Nang” culture is too deep in our roots…….. a “Lao Wai” as the “Wai” word says, he is a “Outsider”……..
Hup hup hooray to our “One Big Family” country and all the stat boards….
My thoughts on this dramatic turnaround is that Chip wanted a full account of the financial standings and probably he is given only partial information (as speculations has it that no one except the privilege few knew exactly the true numbers). How do you expect a CEO to run an operation and turn things around with half bake info? My assumption is that Chip’s departure has got nothing to do with investment strategic differences (this to me is just a cooked up story so that it appears there are irreconcilable differences between them). The scapegoat theory doesn’t hold too as if this is the intention, they could have hire any dickhead to achieve this objective. Underneath all this, Singaporeans and the world knew who screwed up.
I believe Chip will be asked to sign a declaration not to divulge any sensitive information (deemed by TC) directly from him or any of his associated members (including family members)…etc for at least a year (not forgetting that Chip will be compensated). But I think we will definitely hear something once the gag order expires. Chip could make some money out of this as well (he can probably write a book ~ My three months roller coaster ride with Temasek). It is not just us Singaporeans wanting to know the bottom of things, I think the world out there is very much interested as well.
The next CEO – a “seed” planted 30 years ago, ready to use now….
to #87, that book will be banned in Singapore. But I believe it will be top seller at the online bookstores….
86) MMSMPMMC
There is no emperor in International Chess, just a king…
And with regards to WSJ, well, they make Mr Goodyear look like the man….and I think some people may be uneasy when our dear Goodyear plans to implement significant changes just to protect their own status quo
In the near future, authors and lecturers will be able to use Singapore, TH, and GIC as prime example of “don’ts”
Mr Goodyear, is the ‘Man’ of Singaporean’s interest. After so many months working within the ‘inside.’ I am sure he must have so much ‘privilage inside information for now. The skeletons in the closet have been disturbed. Its a matter of time before it will come public. Boy, are we living in interestin time!
3 probabilities:
1) Goodyear found out too much.
2) The establishment was not in favour of Goodyear’s plans.
3) Goodyear found Temasek’s losses beyond repair, and would rather leave before getting blamed for all of it.
To 72: gilbert Goh
Fifthly, during a Presidential election process, a candidate can be mocked and bullied gangster-like until he has to give up the candidacy. The Old Man still reigns supreme in a democratic country. Only Singapore can do that
Who and when did that happend? Recently?
aiyoyo
越描越黑; come straight to the point, solve the issues, get over it..
elites behave so 拖泥带水?
or is it something boiling?
aiyoyo
When Charles Goodyear was appointed as CEO of Temasek in Feb’09, in the next few days there were so much of media coverage (including internet).
When the news announed Goodyear is stepping down, only low profile of coverage. The new was taken off from websites (Straits Times, Today) the next day, focusing more limelight on the ex-Ren Ci monk than themselves. (hoping the people will forget this saga asap)
Many MPs started to act blur, decline to coment, became “mute dogs” all of a sudden. Rather the comments are coming from the “talkative” lecturers from the local Uni.
What a joke.
Ho Jinx, you might b the next “fire-woman”.
The nation is more piss off with Govt, Temasek Holdings, GIC etc rather than HDB upgrading or not.
Heard many r taking down the national flags at the blocks.
mr goodyear, please write your biography soon on this temasek chapter.. cant wait to see wat really happened.!
Notice the news, newspapers and media?? Not much news on this saga already. All concentrating on the poor Ren Ci monk!
Let’s see when LHL will open his gab on this matter! Start counting my frens.
“Singaporeans will be left to speculate on the reasons for the sudden and unexpected exit of Mr Goodyear.”
Does this mean, also the highest educated and scholarly bombastic professionals and intellectuals like LAWYERs and ACCOUNTANTs do not know the actual exact reason?
The real question begging to be asked is IF SO, do they ACCEPT the Status quo or IF NOT, what have they done about it, being the most capable intellectually based on examination result and achievements at least on paper?
We, the people.
‘So, is there more to Mr Goodyear’s departure than meets the eye?’…
I think so. This guy ain’t the real Goodyear #4.
78) Jackson,
“Even if Mr Goodyear decided not to take up the CEO appointment, then why is it returned to Ho Ching? Don’t tell me there’s no more potential candidates except that old lady?”
I have the same question. The reason why they hired Goodyear was due to HC’s failed performance, wasn’t it?