In the case of CDL, the spat occurred even though the listed developer had announced, on March 12, that the directors had discontinued their legal actions and issues had been resolved before the group’s annual general meeting (AGM) on April 23.
Instead, non-executive director Philip Yeo spoke out against three existing directors during the AGM, including two independent non-executive directors, for “pushing the agenda” to appoint Wong Su Yen and Jennifer Duong Young as independent non-executive directors without the board's unanimous approval.
Over 90% voted for the independent directors
Despite the public disagreements between both sides, the new independent directors were voted in with approval from over 90% of CDL’s shareholders.
Another panellist, Professor Marleen Dieleman of IMD Business School, emphasised the importance of understanding the voting structure of family companies, including doing research such as looking up profiles of the ownership structure at the Accounting and Corporate Regulatory Authority (Acra).
This can be especially challenging if the ownership of companies are widely dispersed among many family members and holding companies.
In CDL’s case, The Edge Singapore had noted in a Feb 27 article that Hong Leong Investment Holdings (HLIH) was listed as having 48.55% of CDL, per the group’s 2023 annual report. Based on ACRA filings, HLIH’s major shareholders are Davos Investment Holdings, Kwek Holdings, Kwek Leng Keow, Kwek Leng Peck, Quek Seok Choo and others. As an indication, the address of Kwek Holdings is 16 Raffles Quay, and Davos Investment is 1 Wallich Street, where Guoco Tower is, noted The Edge Singapore’s executive editor Goola Warden.
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“In the AGM held in April last year, HLIH voted as a block. It abstained from an interested party transaction resolution, which was not voted through. Hence, any AGM or EGM with a hostile vote for independent directors and CEO could cause issues within the extended Kwek and Quek clan,” she added at the time.
When dealing with family-owned businesses, decisions are not necessarily made in the boardroom, says Loh, emphasising that family dynamics can supersede boardroom dynamics.
This makes it all the more pertinent as an independent director to get a good grasp on which family member makes the important decisions, he adds, and the views should be highlighted in the corporate governance report as an explanation of non-compliance.
'Water under the bridge?'
To Dieleman, conflicts between two close family members do not mean the matter is over once the court cases are closed.
“If you lose trust among family members, it takes time to rebuild that trust,” she says, adding that the issue may not be “completely over” from the perspective of family members even if it is viewed as such from a regulatory perspective.
The votes may have reflected CDL’s shareholders’ views on the matter, but part of it may be a “matter of the heart” instead of something for the regulators, says Chew Sutat, chairman, Shan De Advisors. Chew, who retired from the Singapore Exchange(SGX) in July 2021, authors the Chew On This column at The Edge Singapore.
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Given the specific case of CDL, whether there are still outstanding issues left to play is up for debate, says Loh. If there are issues, there is an existing ecosystem of professionals such as regulators, lawyers and the SID that can resolve matters collectively as an ecosystem, he adds.
“No stone can be left unturned,” says Loh.
Before joining a board
Loh even used CDL’s name as an acronym for his three words of advice for the event’s 97 attendees, many of whom are directors themselves.
“There are three aspects that I would evaluate before joining a board. The first thing is consistency; is the business [and] the process consistent with my personal belief [and] aspiration?” says Loh.
Loh’s second consideration is “due diligence”. “Talk to the nominating committee, talk to the key stakeholders, have a sense of the external [and] the internal view of what this company is about.”
His final word of advice is to “assess the leadership”. “Talk to the executive, assess what they are doing well and reflect on what they are doing; are they principled in the way they do their daily conduct of running the business? So, consistency, diligence and leadership — CDL.”
