Replacing Ho Ching…what is the problem?

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By Augustine Low

Warren Buffett and Ho Ching have seemingly nothing in common.

One is widely considered the most successful investor of the 20th century and consistently ranked among the world’s wealthiest people. The other is the CEO of Temasek Holdings and the wife of Singapore’s Prime Minister.

But the two share one clear distinguishing trait – both have been subject to the same speculation and scrutiny for years, revolving around their successor.

For over a decade now, questions have been asked – and countless media articles written – about when Buffett, Chairman and CEO of Berkshire Hathaway, will name a successor.

Almost nine years ago, back in 2005, it was reported that the Board of Temasek Holdings had initiated the process of CEO succession as part of a disciplined governance system. At that point in time, Ho Ching had been CEO of Temasek for three years.

Four years later, in March 2009, Chip Goodyear was roped in to be on the Board, and then to take over from Ho Ching as CEO by October that year. But Goodyear resigned abruptly just three months before he was due to be CEO.

Beyond a joint statement from Temasek and Goodyear saying “there are differences regarding certain strategic issues that could not be resolved”, no other reason was given for the succession scrap, despite intense questioning in Parliament.

Since then, questions about Ho Ching’s successor have cropped up regularly. It seems that the search is perennially on.

When Lim Boon Heng took over from S Dhanabalan as Temasek Chairman in August last year, he reiterated that the CEO search was an ongoing process, adding “it is a very, very intense and time-consuming exercise”.

Let’s turn to potential reasons why the search has been so formidable and fruitless.

Repercussions of the Goodyear break-up: The failed succession attempt with Goodyear could have deterred candidates from taking up the hot seat. Did he ruffle feathers? Whose? Why? How? Was it so difficult for him to acclimatise himself to Temasek’s corporate culture? It could also have made Temasek feel that it had no room to fail the second time around – hence the need for total certainty with its next candidate.

Short on details, high on demands: Temasek is a famously secretive organisation; there is a code of silence surrounding it. So candidates aspiring to take over from Ho Ching will have their work cut out knowing exactly what the job entails and how onerous the demands are. It does not help that Ho Ching as CEO has been media-shy – Temasek is one of the very few corporations where the non-executive Chairman is more of a public figure than the CEO. So it becomes really trying looking for precedents and clues to how the CEO has been performing.

Hard act to follow: David Moyes has found that succeeding Alex Ferguson at Manchester United has not been a walk in the park. Succeeding a big name, with big connections, is never easy. Anyone succeeding Ho Ching knows that he or she is stepping into shoes that are hard to fill, whether by reputation or by deliverables. Not to mention that there will possibly be an omnipresent shadow lurking in the background.

Dynamics between CEO and Board: Temasek has a high-powered Board. It’s hard to judge what say the Board members have in the day-to-day running of the company. One thing’s for sure – the CEO has to be skilled enough to work with a team of independent-minded Board members. Does the CEO merely play a passive role and collaborate and carry out strategy devised by the Board? The CEO-Board dynamics could prove every bit as challenging as it looks on paper.

Whatever the reasons are that make the search for a CEO difficult, it isn’t the case that Singaporeans are eager to see Ho Ching give way to a successor. The fact is that Temasek itself has been talking about a CEO successor since 2005.

So we are talking about a fruitless CEO search for close to nine years now! Making it probably the most tedious and prolonged CEO search in Singapore’s history, and in global terms, even rivaling that of Warren Buffett.

Will 2014 be the year that Temasek will succeed in this CEO mission?