He notes that the legal liability for independent directors is high, as minority shareholders have the right to challenge and complain against decisions made. Given this, Yeo says he’ll “think twice” before accepting any board invitations and cautions potential directors that they shouldn’t be “too happy” if asked to join the board.
To him, a board of directors is like a ship: decisions should be unanimous. There is no concept of members voting for or against a decision, because everyone is in the same boat. Only success or failure stems from that decision, he reasons. Should a board calls for a vote, it’s a coup, he adds.
Professor Mak Yuen Teen, chair of GDI’s board of directors, emphasises that directors should prioritise doing the right thing above all else.
“What’s important is that you should never put cultivating a relationship beyond doing the right thing,” he says at the same chat. “When I write [my posts]… it’s not personal. [You] can’t put relationships beyond doing the right thing.”
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He adds that he frowns upon directors accepting invitations to companies’ boards solely for networking and doubts whether there will be “true independence” in the decisions made.
For Yeo, being an independent director is clear: one must represent the interests of shareholders and not be beholden to the company. “The value system has been corrupted. Our hope is that GDI will change that.”
Mak notes that directors should also consider whether a board will act in the interests of the company or primarily in the interests of the major shareholder.
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When asked if becoming a director requires certain qualifications, Mak advises directors to assess if they can add value to the board. While training is important, he warns against the illusion that training alone prepares someone for the role.
At the end of the day, directors should not put themselves in a position where they fear losing their directorship. Mak leads by example: “If I feel I can’t push for change, I’ll step down”.
