Sias continues upholding corporate governance despite AI disruption: David Gerald

WHILE artificial intelligence (AI) presents unprecedented opportunities, the same tried-and-tested principles of investing have not changed, said David Gerald, founder, president and chief executive of the Securities Investors Association (Singapore), or Sias.

In his speech that marked the start of Sias’ annual Corporate Governance Week on Monday (Sep 16), Gerald emphasised that having AI tools that allow for faster and cheaper trading does not mean investors can neglect monitoring their investments. They still need to do their homework and understand what they are buying.

“However, the public can rest assured that Sias will continue to track companies, evaluate their governance, and rate them for the foreseeable future,” he said.

This year’s Corporate Governance Week comprises a key conference, three forums, and the presentation of the Investors’ Choice Awards. The event concludes on Thursday.

In his welcome address, Gerald noted that Sias has been sending listed companies questions every year to improve their corporate transparency and engagement.

These questions centre around corporate strategy, financial performance and corporate governance, and are designed to clarify the rationale behind corporate actions.

They are not a direct challenge to management’s decision-making, but are for enhancing shareholders’ understanding in a collaborative manner, said Gerald.

He cited Sias’ questions to Great Eastern as an example. The association had pointed out that the insurer’s shares were trading far below their embedded value, and there was a misalignment of interest between the majority and minority shareholders.

“Through many such initiatives, Sias has become an important linchpin in the financial market ecosystem, ensuring the integrity and robustness of our capital markets, especially from the perspective of capital providers, (that is,) shareholders and investors,” said Gerald.

He also highlighted an improvement in companies’ strategy and governance disclosure. “The average overall Singapore corporate governance scores have continued their upward trend, reaching 62.4 per cent in 2024 over a five-year period from 2020.”

While companies have improved their disclosure standards in general, mid- and small-cap firms still lack external assurance and need to consider such measures to improve their sustainability disclosures, said Gerald.

He also highlighted room for improvement in the social aspect of companies’ environmental, social and governance (ESG) disclosures, as well as in incorporating long-term sustainability targets with short-term goals to align business objectives with broader environmental concerns.

Minister for Transport, Second Minister for Finance and deputy chairman of the Monetary Authority of Singapore Chee Hong Tat delivered the opening remarks after Gerald’s speech.

AI and ‘the human element’

The key conference on Monday, consisting of presentations and panel discussions, focused on the impact of AI on corporate governance and sustainability.

For instance, a panel on AI in boardrooms examined how the technology can aid decision-making at the highest levels of a corporation, as well as its potential implications on board composition, dynamics and governance practices.

The speakers included Daryl Pereira, director and head of Google Cloud Asia-Pacific’s office of the chief information security officer; Gerry Chng, co-chair of the Singapore AI Technical Committee; Lelia Lim, Asia-Pacific managing partner at consultancy Lim-Loges and Masters; and Pedro Hernandez, chief strategy officer and co-founder of software company Build38. It was moderated by Melvin Yong, Sias committee member and CPA Australia’s country head for Singapore.

While the panellists acknowledged AI’s potential to enhance decision-making, reduce toil and improve regulatory compliance, “the human element” still needs to be at the core of the decisions around investments in the technology, said Lim.

Chng also noted that there is no one-size-fits-all solution, and decision-makers need impact assessments on AI tools to understand the controls and safeguards they need to put in place.

In a separate speech at the conference, Dr Roger Barker, director of policy and corporate governance at the UK’s Institute of Directors (IoD), noted that AI-driven tools have enhanced transparency, decision-making and risk management processes in organisations. However, he emphasised the ongoing commitment to ethical AI governance, ensuring fairness and accountability in utilising such technology.

Reshaping strategies

Dr Barker was also on a panel on how ESG is reshaping business strategies, with Amar Gill, secretary-general of the Asian Corporate Governance Association of Hong Kong; Jonathan Jong, group chief sustainability and risk officer of ComfortDelGro; and Lee Bing Yi, sustainability and climate change partner at PwC Singapore.

They discussed ways to combat ESG fatigue amid investor concerns that such issues had become increasingly politicised.

Other presenters at the conference included EY partner of consulting on AI and data analytics Ritin Mathur, as well as Carmine Di Noia, director for financial and enterprise affairs at the Organisation for Economic Co-operation and Development.

Dr Parag Khanna, founder and chief executive officer of geospatial analytics provider AlphaGeo, gave a presentation on how authorities such as central banks should use AI as a tool in guiding macro-prudential and sustainable economic transformation.

The day also marked the soft launch of a new book detailing how Sias, as an investor watchdog, tackled some of Singapore’s biggest financial scandals and protected shareholders.

The book, Boardroom Knockout: How Singapore’s Investor Watchdog Fights for Minority Shareholders, was edited by Aaron Low and features contributions from six other writers: Grace Ng, Toh Wen Li, Derek Wong, Jaime Niam, Pearl Lee, and Matthew Gan.