At Temasek, a foreign CEO-to-be won’t

July 22, 2009
Singapore Democrats

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Peter Sttein & Costas Paris
The Wall Street Journal

Plans for a foreigner to run Singapore’s Temasek Holdings Pte. Ltd. for the first time fell apart as the state-owned investment firm said Charles “Chip” W. Goodyear won’t become chief executive after all.

The unexpected departure of Mr. Goodyear, formerly chief executive of BHP Billiton Ltd., is likely to raise questions about Temasek’s direction and its willingness to embrace change as it seeks to raise professional standards. Ho Ching, the 56-year-old current CEO who had planned to step down, will remain until a new successor to her is named.

Temasek blamed the decision on “differences regarding certain strategic issues.” The board and Mr. Goodyear, a 51-year-old American, agreed to terminate the transition process and his role as CEO-designate and board member effective Aug. 15. He was to have become CEO on Oct. 1.

Mr. Goodyear couldn’t be reached for comment. A Temasek spokesperson said he was on vacation.

The trim, silver-haired Mr. Goodyear brought a more worldly background to Temasek than Ms. Ho, whose career has been based in Singapore, where she began work at the Ministry of Defense and took over as Temasek’s CEO in 2004.

As CEO-designate, Mr. Goodyear pushed to instill a tighter sense of discipline within the company, say people at Temasek. People who didn’t show up on time for internal meetings were fined for each minute they were late, they say. Typing messages on BlackBerrys during meetings was prohibited.

A major player on the international investment scene, Temasek manages a portfolio with about 185 billion Singapore dollars (US$128.36 billion), and is one of the world’s most experienced sovereign-wealth funds.

Former BHP Billiton Chief Executive Chip Goodyear and Temasek Holdings Chief Executive Ho Ching in February. Temasek said Tuesday that Mr. Goodyear would not succeed Ms. Ho as planned.

At an internal briefing Tuesday afternoon, Temasek’s chairman, S Dhanabalan, told employees that Mr. Goodyear initiated the decision to leave, according to someone present. During a question-and-answer session, those who attended the meeting were largely silent.

Already, some of Mr. Goodyear’s initiatives to bring about change had met with a poor reception. His proposals for the firm’s new strategic direction were considered too risky by some, a person familiar with the situation said.

In addition, this person said Mr. Goodyear planned changes in senior management that weren’t well received by Temasek’s board.

Temasek had named Mr. Goodyear in February as the successor to Ms. Ho, who is married to Singapore Prime Minister Lee Hsien Loong.

His appointment was hailed as a move that would inject fresh blood into Temasek, a company set up in 1974 as a vehicle to hold government investments and assets, including major stakes in some of the city-state’s more prominent businesses.

Aside from his experience at BHP Billiton, Mr. Goodyear was chief financial officer at Freeport McMoRan Inc., a copper-and-gold producer. Some speculated he might help Temasek make inroads into commodity-related investments at a time when rising demand from China is presenting opportunities in that sector.

At the time of his appointment, Ms. Ho noted that “Chip has capabilities that I don’t have.”

Temasek’s chairman says the firm hopes to build on some of Mr. Goodyear’s “process initiatives” even after the CEO-designate’s departure.

In response to whether Temasek would consider other foreigners for the job, Mr. Dhanabalan said in a statement that “Temasek should be helmed by the best person for the job,” and said the firm would continue with its succession planning.

Read also: Q+A-Temasek: Bruised, or battered by Goodyear’s exit?