WHEN American
Chip Goodyear, the former chief executive of BHP Billiton, walked
into the legal department of the Singapore government's $100
billion investment fund Temasek earlier this year, he looked around
and saw files everywhere.
The chief
executive in waiting, a 51-year-old urbane Ivy League graduate
and international business executive, was not
impressed.
Word went out across the organisation, which is one of the
world's oldest sovereign wealth funds: tidy up your room in case
Chip walks in.
Singapore's business community was abuzz yesterday with the
surprising news that Goodyear would not be taking over as head of
the powerful investment agency as planned on October 1.
The agency, which has stakes in most of Singapore's blue-chip
companies including Singapore Airlines, Singtel, and Singapore
power, has been run for the past 5 1/2 years by the low-key Ho
Ching, the wife of Singapore's Prime Minister Lee Hsien Loong.
The official statement revealing that Goodyear would be pulling
out of the job, less than six months after accepting and joining
the Temasek board, said there had been "differences regarding
strategic issues that could not be resolved".
"In the light of the differences both parties decided that it
was in their mutual interest to terminate (the) leadership
transition process," the statement said.
Speculation about reasons
for the split yesterday ranged from the idea that Goodyear may have
found he did not have the freedom he wanted to run Temasek, to a
possible rift caused by his US management style clashing with
Temasek's public service-orientated culture.
One Singapore blog yesterday contained a spoof poster of the
movie Runaway Bride, depicting Goodyear, dressed in a white wedding
dress, lacing his running shoes and getting ready to escape from a
cardigan-wearing Ho Ching. "Catch him if you can," it added.
"Every one is talking about it today," American David Cohen,
director of Asian economic forecasting for Action Economics, told
The Australian. "I assume, at the end of the day, that he wanted to
move in some direction and they (the Temasek board) insisted on
telling him he couldn't do it.
"It's a little embarrassing for them. It was a plum job for
Goodyear. Jobs managing $100billion portfolios don't come along
every day."
The news in February that someone of international standing was to become
the first foreigner to run the agency, founded in 1974, was a sign
of the board's desire to bring in fresh talent.
It was also seen as a way
of calming community concern about the losses
incurred by Temasek, whose assets fell from $US134
billion in March 2008 to $US84bn by the end of
last year.
Only last month, Singapore's founder, Lee Kwan Yew, was lauding
Goodyear's appointment, saying: "We hired the best."
But
as Goodyear walked the corridors of Temasek's Singapore
headquarters in the past few months, it became obvious that
he brought a very different management style to the
organisation.
Yesterday's Wall Street Journal noted that
Goodyear had been keen to instill a "tighter sense of
discipline" in the organisation, fining people for turning up late
for meetings and banning the use of Blackberries during
meetings.
A
keen cyclist, Goodyear started an in-house cycling club in the
organisation.
He was known for walking
around the organisation, entering offices unannounced and chatting
informally to staff.
The culture gap between
the Wall Street-honed executive who had never lived in Singapore
and the complex, more bureaucratic approach of the government-owned
agency was becoming apparent. Singapore is one of the Asian
countries most open to Westerners, but there are many cultural
differences that are not always immediately obvious to
outsiders.
"It would not have been
easy for an outsider, particularly a Westerner, to come into a big
Singapore Government-owned organisation," said one Singaporean
academic yesterday.
"He would have a lot of
work to do to get used to the local politics, society and
management culture."
With his strong background in the mining industry, there had
been much speculation that Goodyear might cut back Temasek's
extensive investment in international banks and finance houses to
focus on commodities and natural resources. Goodyear, who joined
BHP in 1999 as chief financial officer, was instrumental in
building the company into the world's top mining company largely as
a result of its merger with Billiton of South Africa.
Under Ho Ching, Temasek
boosted its holdings in financial stocks to about 40 per cent of
its total investment. It was a move that cost the organisation
dearly in the wake of the global financial crisis. Temasek lost
more than $US4 billion on its investments in organisations such as
Merrill Lynch, Barclays Bank and Bank of America. Under Ho, the
organisation also made its controversial investment in Shin
Corporation of Thailand, the telecommunications company controlled
by former prime minister Thaksin Shinawatra.
The embarrassing
transaction provoked a storm of controversy, becoming one of the
factors behind his demise as prime minister. Once known for its
secrecy, Temasek has made steps in recent years to become more
transparent. It began releasing annual reports and meeting with
foreign journalists.
Its public relations staff have made several visits to Australia
in the past few years to explain the organisation and its strategy
and to stress its independence from the Singapore Government.
But its attempts at openness have only gone so far.
Asked to comment about Goodyear's departure, New Zealand-born
businessman Simon Israel, who joined Temasek several years ago as
an executive director, said: " Unfortunately, from time to
time, chief executive succession does not work out, no
matter how carefully it is prepared.
"This is the case here and I wouldn't read more into it. Our
press release has explained the reason for it and we are not going
to elaborate further."
http://www.theaustralian.news.com.au/business/story/0,28124,25821574-36418,00.html
