SIAS calls for governance clarity from Great Eastern Holdings

SIAS urges the insurer’s board to consider and address shareholders' requests proactively.

In a recent statement addressed to the Chairman and members of the Board of Great Eastern Holdings, the Securities Investors Association (Singapore) or SIAS, expressed its support for responsible shareholder activism aimed at enhancing shareholder value. 

SIAS's remarks come in response to the company's response to certain resolutions proposed by minority shareholders for the upcoming Annual General Meeting (AGM).

SIAS emphasised the importance of addressing persistent underperformance, which could indicate a deeper misalignment between a company's fundamentals and market perception, posing long-term risks to all shareholders. 

Drawing guidance from SGX RegCo on shareholders' requisitions, SIAS urged the Great Eastern board to objectively consider the purpose of the shareholders' requests and engage proactively to address their concerns.

SIAS highlighted the value in allowing shareholder votes on the proposed resolutions at the AGM, noting that each resolution aims to strengthen the alignment of directors' interests with those of all shareholders, a fundamental principle of good governance.

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The association encouraged the board to exercise discretion in including these resolutions on the agenda, rather than dismissing them based on legal technicalities.

Moreover, SIAS suggested that the remuneration committee consider paying 30% of existing director fees in Great Eastern shares instead of cash, promoting greater alignment of interests between directors and shareholders.

In addition to these recommendations, SIAS posed several questions to the management and board, seeking greater clarity on various aspects including the impact of SFRS(I) 17 adoption, total shareholder return trends, benchmarking against peer companies, and performance criteria used in board assessments and executive remuneration.

SIAS expressed its willingness to engage with senior management and the board to discuss these concerns and work towards mutually beneficial solutions.

Great Eastern Holdings Limited has yet to respond to SIAS's statement, but with shareholder activism on the rise, it remains to be seen how the company will address these issues at the upcoming AGM.