Daily Lessons from Life 21 July 2009

"Tue, Jul 21, 2009 Reuters - Goodyear not taking Temasek CEO role

Singapore's Temasek Holdings said Charles (Chip) Goodyear has decided not to become the chief executive of the state investment firm due to differences over strategy, less than six months after accepting the post.

Ho Ching, the current CEO, will continue to remain executive director and chief executive, Temasek said in a statement on Tuesday.

'Four months into the leadership transition, the Temasek Board and Mr Goodyear have concluded and accepted that there are differences regarding certain strategic issues that could not be resolved,' the statement said.

The shock announcement came as Goodyear, the former CEO of BHP Billiton , was ready to take over from Ho on Oct 1.

'I'm sorry that we are unable to continue with the leadership transition. Temasek has a fantastic platform and I wish the Board, Ho Ching and the team all the best,' Goodyear was quoted as saying in the Temasek statement.

His abrupt move came after analysts said he could overhaul the firm's investment strategy after Temasek lost more than $4 billion this year from dumping stakes in Bank of America and Barclays.

Goodyear was also widely expected to trim Temasek's financial holdings and move aggressively into commodities and energy and into emerging market infrastructure and consumer retail sectors, analysts and bankers have said.

With 40 per cent of its holdings in financials, the market meltdown last year saw Temasek's portfolio lose nearly a third in the eight months to November, sparking unprecedented criticism in Singapore about its strategy. The size of its portfolio shrank to $84 billion as of Nov. 30."

This is a very dramatic and unexpected turn of events. A lot of questions will be asked and genuine answers have to be provided to Singaporeans who are rightfully concerned about this important appointment that was unveiled a few months ago with great promise of a 'new dawn' and the 'need to change' and 'the capture of the right candidate after an extensive internal and global search'!!

The lessons for me are:

1. be honest and address the difficult issues that will be raised by intelligent and concerned citizens on how such a 'robust and vigorous' selection process still turned out such unexpected result? Do we need to review the selection process by new people with new microscope and perspective?;

2. many reputations of many heavyweight leaders spoke and supported this initial appointment, they will need to CLEARLY explain what are the rationale for the change of heart or the disconnects in the initial selection process? Someone will have to take responsibilities for this and not blamed it on the adminsitrator of the selection process!;

3. is it possible that the outgoing CEO who were ready to step down 4-month ago SUDDENLY become qualified to run the company against just because the CEO-designate will not take the job? This is a very serious and BIG credibility issue. It will be offensive to assume that the intelligent questioning Singaporeans will not take offense by such an assumption!!

The concerns must be addresssed with integrity and openness. It concerned the core foundation of Singapore's government system - that leaders are choosen by their own merits and not by who they are. The parties involved in this situation from the local sides will always invited challenges. Singapore need to address it heads on for the long term survival of the ruling party - who had done good job though can still improve!