Date: 5 August 2020, Wednesday
Mr Ong Chong Tee, Deputy Managing Director of Monetary Authority of Singapore (MAS) and a member of the Council for Board Diversity (CBD), spoke at a Digital ‘Fireside-Chat’ organized by CBD on 5 August 2020. The discussion was led by Ms Janet Ang, Independent Director of Singapore Press Holdings Limited and Chairman of NUS Institute of Systems Science.
Mr Ong shared his perspectives on navigating a “co-Covid” (living alongside covid19) world in the new normal, the importance of diversity (broader than just gender) and resilience in managing times of crisis as well as the significance of strong partnerships amongst stakeholders in businesses, the government, and society; and shared tips for existing and aspiring board directors.
Participants of the Digital Fireside Chat with Mr Ong Chong Tee. Photo by Council for Board Diversity.
Our key takeaways:
- Covid-19 has highlighted the importance of having more cognitive diversity* as it facilitates robust deliberations through different perspectives, thus enhancing long-term strategy (to create value) and risk oversight (to minimize risk that can destroy value).
* Cognitive diversity recognizes the importance of differences in perspectives and the way different people process information. This is predicted by a variety of factors not limited to gender, ethnicity, or age.
- During times of crisis like the covid19 pandemic we are experiencing, boards find themselves having the urgent need to focus more on strategy for resilience, risk management and stakeholder engagement so as to ensure that the business is best able to weather the crisis and be ready for growth in the future. Some matters to consider are:
- Operational resilience – e.g. how to ensure that operations can continue without physical proximity whilst ensuring proper checks and balances are in place, what are the parameters to consider in sharing data, etc
- Business resilience – in terms of dealing with customers, stakeholders, etc.
- Human Capital resilience – continuous learning, mental and physical health and wellness, financial resilience, etc
- The regulator ensures resiliency of financial institutions in Singapore by requiring adequate resources to cover stress test scenarios under steep parameters which incorporates multiple negative impacts on the economy and business.
- Companies are challenged in their decision making to ensure inter-temporal consistencies i.e. decisions that are made today do not limit the choices for tomorrow, or put the organization at greater risk in the future. There are trade-offs to every decision and they must be carefully discussed at the board level and duly considered for short-term survival and longer-term sustainability.
- Some ideas on achieving greater cognitive diversity on the board:
- Looking beyond the typical profile of candidates – be open to searching for candidates outside of the industry and perhaps consider those who can think through issues that are important to society (e.g. social / climate / technology / international relations).
- Focusing not only on the skillsets, competencies and experiences they bring but also on the character and background of candidates – their cultural, social and educational backgrounds. Some traits of effective board directors may include:
- Raising constructive questions
- Having a desire to collaborate and build trust within the board
- Not being judgmental of others
- Good judgement
- Tips for board directors or aspiring board directors:
- Continually educate yourself about the firm, the business you are involved in, and other industries
- Be aware of your fiduciary responsibilities as a board director
- Seek out advice from mentors and experienced board directors