3 things to note as an independent director in a family business
SINGAPORE – More than half of the 600 companies listed on the Singapore Exchange (SGX) are family-run businesses.
So how do independent directors sitting on the boards of such companies navigate the complexities it brings, especially when decisions can be made over the dining table and WhatsApp chats rather than the boardroom?
The issues that can arise in family-run businesses were thrust into the spotlight when City Developments Limited (CDL) executive chairman Kwek Leng Beng sued his son Sherman Kwek, who is the property giant's group chief executive officer.
The tussle between father and son for control of CDL came to light on Feb 26, and culminated in the older Mr Kwek dropping the lawsuit, but not before matters such as the appointment of independent directors came under public scrutiny.
These issues were part of a panel discussion held by the Singapore Institute of Directors on June 25, titled 'When Board Members Disagree – Lessons from Recent Public Disputes' at the Park Royal Collection Marina Bay hotel.
Panellists provided tips for the gathered directors, ranging from how to discharge their duties responsibly in the face of opposition and knowing when constructive disagreement becomes destructive.
Tips for independent directors:
1. Be sensitive to what is happening within the family, outside the business.
There is definitely some spillover between from what happens in the family into the business, said Dr Marleen Dieleman from IMD Business School. Many family businesses are several decades old and could have gone from a second generation of leaders to a third generation of them, which means there might be multiple stakeholders who may not agree on how to run things .
'As a director, we cannot just sit on the board and ignore that these dynamics are going on. Why? Because, if there is a conflict between family members, it will very easily go from constructive conflict to destructive conflict,' she said.
'Being in a family business is a little bit like Hotel California. You can check in, but never leave,' she said, adding that this makes the conflict even more intense.
2. Know who holds the decision-making power in the business.
The No. 1 question to ask is: who is the most important person in this family that is making decisions, and then you will find sometimes that that person is not on the board, said Dr Dieleman.
Directors also have to think of it not just as a single company, but as a group.
'Most of the companies that are listed here are part of a group. It's rarely ever one company, and that means you have to also map out the group,' she said. This means understanding the related transactions that are going on around the family firm, to see the strategic picture the family has in mind and how one company fits into the bigger whole.
'Look at the spread of the shareholding by family members in the family business – figure out where is the voting power among the family members, because it is not necessarily the person who is the key leader on the board representing the family,' she said.
For instance, the ownership of CDL is widely dispersed among many different family members in holding companies . Even in the first generation, the older Mr Kwek had several brothers involved in the group, she added.
'When you deal with family-owned businesses, it's very important to look at the voting structure and to see who will actually have the power to vote one way or another, and when that vote is dispersed, it can be a very complicated story.'
3. The best interests of the company come first
Even if it means they may get voted out of the board, the responsibility of independent directors is to always act in the company's best interests .
Mr Chew Sutat, chairman of consultancy Shan De Advisors, said: 'When there are disagreements on the board, directors should... try to find a way to influence and get the outcome desired in the interest of the company.'
Fellow panellist Rachel Eng, managing director of law firm Eng and Co, said directors also need to choose their battles, especially if they find they are pressured by others on the board to go in a certain direction.
She said that arguments can get emotional, and directors can feel that those who do not vote for their views are personally against them.
There are also often many decisions to be made, and directors need to differentiate between decisions which are strategic and operational as opposed to those which are problematic or illegal, she said.
'So, first choose your battle. If it is really unlawful, illegal, you have to put your foot down, and immediately you have to step down.'
Eng and Co managing director Rachel Eng and NUS Centre for Governance and Sustainability director Lawrence Loh on the panel organised by the Singapore Institute of Directors.
PHOTO: SINGAPORE INSTITUTE OF DIRECTORS
Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore, said that as a last resort, if board directors cannot have their dissenting vote on record, they can even consider becoming internal whistle-blowers.
Ultimately, Mr Chew said directors all have experiences of feeling compelled or pressured to do something that others may feel strongly about.
'We struggle with it. It's a practical reality,' he said. But all one has to do, he added, is ask: 'Am I doing the right thing for the company?'
Sue-Ann Tan is a business correspondent at The Straits Times covering capital markets and sustainable finance.
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
International Business Times
5 hours ago
- International Business Times
Why Modern Singaporean Companies Need a Purpose-Built Workplace Tool — Beyond WhatsApp
Are you ready to move your corporate collaboration beyond WhatsApp's chat threads? In Singapore's high-performance business landscape, every second counts and fragmented tools like WhatsApp or email aren't cutting it anymore. Teams operating across different offices, remote work setups, or city-wide field operations deserve a platform designed for structure, security, and real-time teamwork. Enter the world of internal communication software, tools built to unify your internal communication and improve collaboration. It combines instant messaging, shared calendars, collaborative document libraries, digital forms, and employee recognition all within one secure, mobile-first platform tailored to Singapore's fast-paced, multilingual workplaces. According to the 2024 Deloitte Asia-Pacific Future of Work report, over 70% of employers in Singapore are adopting hybrid or remote work policies. Yet many still stitch together makeshift tech stacks that lead to lost messages, siloed knowledge, and frustrated employees. AgilityPortal eliminates that by: Providing secure group chats, announcements, and file access with single sign-on that respects corporate data policies Enabling project hubs where teams can work together effectively without switching apps Offering multilingual support and local timezone-aware scheduling, which is critical for regional teams and multicultural employees The result? Faster onboarding, streamlined operations, and a culture grounded in transparent, purposeful communication no more chasing links or hunting through overflowing chat threads. AgilityPortal is already helping Asian enterprises from logistics outfits in Johor to SMEs in Orchard Boulevard build cohesive, engaged digital workplaces that improve retention, compliance, and productivity. For Singaporean companies navigating regional expansion, data sovereignty, and multilingual communication, AgilityPortal offers built-in compliance features and flexible permissions that safeguard internal data while facilitating cross-border collaboration. Whether you're managing a team in Tampines or coordinating vendors in Jakarta, it scales with your needs. Unlike legacy intranet systems or loosely connected apps, AgilityPortal delivers everything in a single, user-friendly interface, reducing tool fatigue and driving adoption from the start. The platform not only empowers your teams to do their best work but also provides leadership with the insights needed to measure engagement, productivity, and culture in real-time. Ready to experience a more innovative digital workspace? Visit to start your free trial no credit card required.
New Paper
8 hours ago
- New Paper
BTO Telegram groups connect thousands in new kampung spirit
Mr Thomson Lim designed the interiors of his two-room flexi Build-To-Order (BTO) flat in Tengah's Garden Vale project, and would periodically share pictures of the carpentry in the estate's chat group on Telegram. When the renovations were done in June 2024, other residents were curious about how his flat looked, so he hosted an open house for around 20 neighbours. The 50-year-old had met his fellow Tengah residents through Telegram and was keen to share his experience with them, so they could make decisions about their own renovations. "I enjoy bonding with the residents from our chats... I believe sharing is always a good thing to do in life," said Mr Lim, who works at a fast-food chain. He has since become close friends with the neighbours he met on Telegram, going for meals and exercising with them. They even volunteer together at the Tengah Community Club, helping out at events such as family day, award ceremonies and workshops. Mr Lim and his Tengah buddies are among an estimated tens of thousands of Singaporeans who are members of resident-run Telegram groups for BTO estates here. There are no official numbers of BTO Telegram groups, but they can be easily found by searching on Telegram or BTOHQ, a community-run website sharing information on local properties. The size of each of these groups can range from a few hundred to thousands. Such groups started to gain popularity over the last few years when demand for BTO flats surged in 2020. Around the same time, Telegram also gained traction here as a messaging platform. While residents of BTO projects also form chat groups on WhatsApp, another popular messaging platform, such groups have proliferated on Telegram, likely because it allows up to 20,000 members, compared with WhatsApp's 2,000 members. Telegram's large group size limit allows a chat group to be created for an entire BTO estate, rather than just for one block or specific resident interest groups. Members can also chat in different channels created within the group. WhatsApp also allows members to chat under different topics. While Mr Lim's Telegram group has 1,300 members, he does not know all of them personally. He got to know the residents who reached out to him individually on Telegram and sometimes even meets up with them. These groups serve as hubs for information and commonly start as a way for residents to get information on their BTO projects and seek advice on everything from BTO queue numbers to various Housing Board policies and schemes, to estate amenities. After residents move in, many groups evolve to become avenues through which residents socialise, trade items and share updates on estate developments. Such groups are usually created by one or more residents before the BTO's balloting stage, and are open to members of the public. Residents can also volunteer to run smaller BTO project groups from the larger estate group. At Punggol's Northshore Residences, one resident said he set up the BTO estate's Telegram group as an information hub for his neighbours about a year before they collected their keys in 2020. The 39-year-old project manager, who wanted to be known only as Jerry, said residents would join the group to be "in the know" as there would be discussions about project milestones. Some residents, such as Mr Yong Ming Rong, 35, have found such groups useful for getting advice on home furnishings. The private tutor, who lives at Northshore Residences, had initially sent a message to neighbours in his BTO Telegram group to give away some coffee powder. He later told another resident in the group that he was considering getting solar film to cover his windows, and the resident invited him to her home so he could see what solar film on windows looks like. "It helps to build a bit of a kampung spirit knowing there are people who can answer each other's questions," Mr Yong said. Tengah, a relatively new HDB town with 18 BTO projects, has a number of Telegram groups, including one with around 10,000 members. The group that Mr Lim runs allows members to chat across 17 different channels on topics such as childcare, gardening, group buys and home-based food businesses. Through Telegram, another Tengah resident, Mr Chris Loh, met others in the estate who, like him, love gardening. The 44-year-old senior operations executive said some residents would occasionally reach out to him through the app for help to propagate and pot their plants. "When you like something or there is a common topic, you want to share. For example, sometimes when you work from home, people ask if you want to eat lunch together," he added. Freelance photographer Chan Kai Lun created an estate health and fitness Telegram group where Tengah residents organise activities such as group runs. "Without this space to voice out and share, most people would remain isolated, only (saying) 'hi-bye' with the next-door neighbour. But I have made many good friends in Tengah through Telegram. It makes a real difference," said the 42-year-old. Unlike WhatsApp, Telegram allows its users to maintain privacy as phone numbers are not needed to create accounts. Dr Vincent Chua, an associate professor in sociology and anthropology at NUS, said Telegram groups are a way for people to balance maintaining privacy with being sociable. Mr Thomson Lim (right) and his Tengah buddies are among an estimated tens of thousands of Singaporeans who are members of resident-run Telegram groups for BTO estates here. ST PHOTO: LUTHER LAU Pointing to how these neighbourhood online groups tend to focus on exchanging information over relationship-building, he said it is one way the kampung spirit among residents has evolved - it has become "quieter but still present" through the way residents show support for one another online. Dr Chua added that building strong ties is still possible when online interactions are paired with or lead to offline interactions. "They nourish each other. Support online translates offline. Over time, they blend and human relationships become friendships." Tengah resident Cyrus Xu, a 32-year-old additive manufacturing engineer, linked up with his future neighbours on Telegram in 2022, even before choosing his unit. He collected his keys in March 2025 and still keeps in touch with them. "We get to know what our neighbours are up to if they are keen to share, and can ask for help at our fingertips," said Mr Xu. "I have got to know many neighbours from all the blocks."
Straits Times
13 hours ago
- Straits Times
DBS hits record high above $47; CDL up after director Philip Yeo announces resignation
Find out what's new on ST website and app. More than 4.2 million DBS shares changed hands on July 18, the day the bank was named World's Best Bank by Euromoney for the third time since 2019. SINGAPORE – Shares of DBS Bank crested an all-time high of $47.05 on July 18 before ending the week slightly lower at $46.99. More than 4.2 million DBS shares changed hands that day, when Singapore's largest bank was named World's Best Bank by Euromoney for the third time since 2019. Just a day earlier, on July 17, RHB analysts in a research report reiterated their 'buy' call on DBS with a $47 target price. However, they also warned of increased share price volatility for DBS, citing the bank's large loan book and the elevated valuation of its shares compared with their book value. Another stalwart of the Straits Times Index, City Developments Limited (CDL), jumped 6.3 per cent on July 16, following news that long-serving director Philip Yeo would step down from the board. The veteran former civil servant's last day with CDL will be July 31. The move marks a turning point in the uneasy stalemate between chief executive Sherman Kwek and his father, Mr Kwek Leng Beng, with whom Mr Yeo had been aligned in a feud on board composition and corporate governance. Top stories Swipe. Select. Stay informed. Singapore Priority for singles, higher quota for second-timer families to kick in from HDB's July BTO exercise Singapore Both Bukit Panjang LRT disruptions in July linked to newly installed power system: SMRT Singapore 1 in 3 vapes here laced with etomidate; MOH working with MHA to list it as illegal drug: Ong Ye Kung Asia Johor Bahru collision claims lives of e-hailing driver and Singapore passenger Sport Arsenal arrive in Singapore for pre-season matches with AC Milan and Newcastle Business Crypto exchange Tokenize to shut down Singapore operations Singapore More initiatives and support for migrant community announced at Racial Harmony Day event Singapore ComfortDelGro to discipline driver who flung relative's wheelchair out of taxi Observers said the move could be a step towards unlocking greater shareholder value as the younger Mr Kwek will be able to chart the company's direction more assertively. CDL's shares closed on July 18 at $5.90, up 8.7 per cent through the week. Centurion reveals plans for new Reit Shares of Centurion Corp closed the week at $1.73, down more than 6.4 per cent from the all-time high of $1.85 on July 14. The accommodation provider last week moved ahead with plans to list a real estate investment trust (Reit) on the Singapore Exchange (SGX) mainboard. It announced on July 14 the name of the Reit – Centurion Accommodation Reit – and an initial portfolio of 14 properties that Centurion will divest from its books as the Reit sponsor. The portfolio will comprise five purpose-built worker accommodation assets in Singapore, eight purpose-built student accommodation assets in Britain and one in Australia. A new upmarket student accommodation property will be added to the Reit as its 15th asset once it is ready for occupation, bringing the total portfolio value to $2.1 billion. Centurion Accommodation Reit's listing is still pending approval by SGX and the Monetary Authority of Singapore. Phillip Securities Research's Chong Yik Ban told The Straits Times the Reit would need to offer a target yield of 7.3 per cent to 7.7 per cent to be attractive to prospective investors. This is because Singapore banks pay an average dividend yield of about 6.7 per cent, and investors would demand a higher yield for the additional risk they take to buy a newly listed Reit. Mr Chong noted that newly listed NTT DC Reit, which comprises data centre assets and is backed by Japanese telco giant NTT, has forecast an annualised yield of 7.5 per cent for the nine months from July 1, 2025, to March 31, 2026. This sets a benchmark for Centurion's new Reit, in which it will hold a 35 per cent to 40 per cent stake, to meet or exceed. Mr Chong said the new Reit is potentially capable of achieving similar yields. Based on projections, Centurion aims for the Reit to distribute 100 per cent of its annual distributable income from the listing date until 2027. Lim & Tan Securities' Chan En Jie told ST that investors will most likely look out for attractive returns and stable payouts from each Reit unit when evaluating their options in an environment where interest rates are falling. He noted that the growth in workers' dormitories reflects the robust construction demand expected in Singapore over the next few years. But Mr Chong warned that if tightened, student visa restrictions could hurt demand for student properties in the Reit. Aviation, offshore and marine counters rally Shares of Singapore Airlines gained 2.2 per cent over the week to close at a one-year high of $7.44. The carrier posted its June operating results earlier in the week, reporting a 4.5 per cent year-on-year increase in passenger traffic. The growth outpaced the expansion in passenger capacity, buoyed by the start of the summer travel season and Singapore's mid-year school holidays. Shares of in-flight caterer and ground-handling company Sats as well as SIA Engineering, which provides aircraft maintenance, repair and overhaul, also rose. Sats closed on July 18 at $3.27, up 4.8 per cent through the week, while SIA Engineering closed at $3.34, up 3.1 per cent over the same period. Offshore engineering giant Seatrium, meanwhile, surged 12.8 per cent, closing the week at $2.38. The company has started to deliver the first of six floating production storage and offloading vessels to Brazilian state-owned oil company Petrobras. Other offshore and marine stocks also saw strong gains. Vessel operator Marco Polo Marine surged more than 20 per cent to 5.5 cents a share for the week, its highest in more than five months, with over 160 million shares changing hands on July 18. Mermaid Maritime is also up, rising 9.6 per cent through the week to close at 13 cents. CH Offshore rose 20 per cent to 1.8 cents last week after completing its rights issue. In a July 18 report, Lim & Tan analysts noted that the vessel operator is 'extremely undervalued', making it an 'ideal privatisation candidate'. Other market movers NTT DC Reit ended its first week of trading on a weak note, as investors weighed its costly artificial intelligence ambitions against an uncertain outlook amid ongoing tariff concerns. While the Reit's public offer, the largest on the SGX in a decade, was 9.8 times oversubscribed, its units ended flat at US$1 (S$1.29) on their July 14 debut. They closed the week at 95 US cents, down by almost 6 per cent. In contrast, China Medical System surged 11.2 per cent to close at $2.28 on its July 15 debut, up from an initial offer price of $2.05 for the secondary listing of the Hong Kong-listed pharmaceutical firm. Home-grown fabricator BRC Asia announced after the market close on July 14 that it had secured $570 million worth of contracts for Changi Airport Terminal 5. Its shares surged to $3.71, climbing more than 11 per cent from the start of the week. Semiconductor firm Frencken also posted a strong performance, with its stock peaking at $1.49 during the week before settling at $1.45 on July 18, its highest since announcing plans in June for a larger facility in Kaki Bukit. Shares of PC Partner, seen as a proxy for US-listed Nvidia, rose 13.7 per cent through the week to close on July 18 at $1.33. PC Partner, which is also listed in Hong Kong, distributes electronics that use Nvidia graphics cards. Nvidia shares are trading at an all-time high above US$174 after the company said on July 16 it expects to resume sales of its less-advanced H20 artificial intelligence chips to China after a three-month pause. What to look out for this week Property revitalisation firm Lum Chang Creations is expected to start trading on July 21 on Catalist. A total of one million shares offered to the Singapore public at 25 cents each were 47.3 times oversubscribed. The company raised total gross proceeds of $12.25 million from the offering, resulting in a market capitalisation of $78.75 million. UOB Kay Hian has initiated coverage on the company with a buy call and a target price of 39 cents.
