What is corporate governance? It is many things but in GIC's case, accountability, auditing and disclosure are some of the more pertinent aspects. More relevant in the Singapore government context is the Corporate Governance Committee's working definition,

"Corporate governance refers to the processes and structure by which the business and affairs of the company are directed and managed, in order to enhance long term shareholder value through enhancing corporate performance and accountability, whilst taking into account the interests of other stakeholders. Good corporate governance therefore embodies both enterprise (performance) and accountability (conformance)."

However, these quotes from a 2004 Parliament sitting on Government-Managed Assets encapsulates the mindset the government has on GIC as the exception to the very corporate governance practices that the government preaches.

Question and answer on the prevention of Singapore dollar from speculative attack and transparency.

Mdm Ho Geok Choo: Two supplementary questions for the Minister. How can the Government actually strike a balance between transparency and the need to protect our currency from speculative attack? In an era of liberalisation and transparency, how strong and relevant are Minister Mentor's two previous observations on this subject? One is about the unflinching integrity that stands at the core of our GIC, and two is that there is a system of checks and balances within the Government to keep the GIC in line.

Mr Raymond Lim Siang Keat: The two questions are actually one question because the Member posed the first question and she has answered it with the second question with what Minister Mentor had said in the past. What he said remains relevant. The key issue here, like she has correctly pointed out, is how do you ensure accountability. Accountability here is ensured by having the GIC's management directly accountable to the GIC board. And this board comprises prominent public and private sector individuals and has to be approved by the President. So, within the system itself, there is an institutionalised mechanism to ensure the integrity of the process.

Question and answer on checks and balances in GIC

Mr Sin Boon Ann (Tampines): Sir, will the Minister please enlighten this House as to how the selection of prominent members to the board itself give the public the assurance that the Government will ensure maximum return on its investments when it is managing the public funds?

Mr Raymond Lim Siang Keat: As I said, these individuals are prominent individuals in the public and private sectors. They are on the board of GIC. They are given full access to the information on the performance of the funds, and the funds are benchmarked against the investment mandate. It is important to set out what is the investment mandate, and the principal mandate of GIC is to maintain and enhance the value of our reserves over the long-term, because this underpins confidence in the Singapore dollar. Against that benchmark, GIC has given us good returns over the long-term and performed creditably against international benchmarks like the MSCI equity indices, the Lehman Bond Index and against major international fund houses.

The simplistic answer the government is putting on the table is that GIC's lack of disclosure is non-negotiable. Nevertheless, Bo Zheng Hu earlier hinted that no public policy is non-negotiable and a balance can be realistically achieved where the people's interests and the government's interests can both be met, and the balance would not be detrimental to the State's interests. I will try to expand on his musings by outlining what information can be released and who evaluates the information and GIC's performance.

One constructive way forward is to publish historical performances of the GIC but only for anything older than X number of years. The X number is arbitrary but the unit trust's industry of the standard 3 or 5 years for assessing a particular unit trust's performance is a good starting point. The government's explanation that disclosure of GIC's asset allocation would undermine national interest is harder to substantiate if current information on GIC's investment priorities are still classified but historical data of anything more than the industry standard 3 or 5 years ago can be released.

The other step the government can take to meet the public's need for visible measures to ensure accountability and transparancy in GIC without compromising GIC's manoeuvres in the market is to set up a GIC watch committee that reports to Parliament. Currently, GIC is not obliged to update Parliament on its performance. This GIC watchdog, which complements the role of the GIC board,is to be made up of mostly NMPs, and opposition and incumbent party MPs. The reason for this committee to be made up of mostly NMPs is so that the group would be officially as non-partisan as possible. Furthermore, the inclusion of NMPs would be an excellent confidence building measure for both the public and NMPs on the important frontline role NMPs can play in public service. There are various ways to approach this watchdog unit and one avenue is for this GIC watchdog to be kept in the loop about GIC's performance annually. This GIC watchdog would report to Parliament very briefly, without going into details on grounds of national interest, on whether they are satisfied with GIC's performance for that year.

Therefore, the revamped GIC disclosure practice can take this form - every year, the public would be assured that the GIC watchdog made up of NMPs as well as opposition MPs, would be privy to the performance of GIC. These people in Parliament, not necessarily those from the ruling party, act as our eyes and ears on how GIC is doing in investing Singapore's money. Morever, every 3 or 5 years, GIC's financial reports would be released for public consumption, thus also fulfilling the public's need for transparency and accountability at another level.

The Void Deck's position on GIC transparency and national security, as in any policy, is one of balance. We try to explore, not a we-know-all dictate, solutions to what we perceive are problems in government policy. In policy-making and meeting State intetests, nothing is yes or no, but almost everything is a yes and no. Balance can be negotiated and re-negotiated, and yes and no qualified. This negotiation process is important for both the government and the people as it preserves the compact. If some in the government think that the brief relevation on GIC's peformance created a "give an inch want a yard" reaction from us the people, they are quite right on describing our mood.

But in the pursuit of Singapore's interests in the sense of visibly ensuring accountability in GIC, what is wrong in wanting a yard, within reason?