Address by Minister Lee Boon Yang at the Singapore Business Awards held at the Grand Ballroom, Ritz Carlton Hotel


Mr Alan Chan, Chief Executive of Singapore Press Holdings,
Mr Oliver Gritz, Chief Financial Officer, Asia-Pacific, DHL, and Ms Yasmin Khan, DHL's Singapore
Country Manager
Mr Hsuan Owyang, Chairman of the Singapore Business Awards Panel of Judges,
Ladies and Gentlemen,

Good Evening,


It gives me great pleasure to join you at this 18th Singapore Business Awards presentation, to honour the entrepreneurial spirit, managerial acumen and outstanding achievements of the award winners. I will not make too long a speech tonight. One reason is, the award winners have been waiting since the 3rd of April to receive their awards and I really should not keep them waiting any longer than necessary. Another reason is, when I took out the speech I had prepared for the event originally scheduled for 3rd April, I found that so many things had happened in the last 3½ months that some of what I had written earlier was no longer relevant.

Of course, you are familiar with the outbreak of SARS which caused the event to be postponed in April. Towards the end of March, the organisers felt it was just not practical nor prudent to proceed, as the cause of the outbreak was still very uncertain and measures to contain the disease were not yet tested. Fortunately, we were able to contain SARS quite rapidly and by 1st Jun 2003, Singapore was taken off the WHO list of SARS affected countries. So here we are tonight, relieved that SARS is behind us, and ready to toast to the exceptional business achievements of the Award winners. Unlike past presentations, the names of the winners have already been announced ahead of this presentation ceremony. I am delighted with the opportunity to belatedly but warmly congratulate the three winners of the Singapore Business Awards 2003. They are of course, Mr. Lee Ah Bee, the Businessman of the Year, Mr. Neil Montefiore, the Outstanding Chief Executive and Accord Express, which won the Enterprise Award. You will, later tonight, hear more about their achievements. Let me just add here my deep personal admiration for what each of the award winners have done.

People at the Centre of Business Success

When I left MOM, I told the media that I am back to lifelong learning. This time I am the learner, not the one telling people to learn. I am trying to learn the ropes as fast as possible in my new ministry. One thing I learnt very quickly is the importance of having a strong team to work with. So for this evening, I would like to talk about the importance of people at the heart of business success. I am sure that if you ask tonight's award winners, they will tell you that business success did not come about easily for them. And especially when they were building their enterprises during what may be described as "exciting time". I read in the BT of 4th April that both Mr Lee Ah Bee of Amtek and Mr. Henry Tan of Accord Express attributed their success to a support network of staff, while Mr Montefiore was highly respected for his management style. Mr Tan considered "dedicated and professional people as the backbone of the company". This may not be the sole reason but could well be the X-factor which enabled their companies to weather the 1997 regional financial collapse and the subsequent economic roller-coaster ride. I believe that at the heart of a successful company is a bunch of great people. It is not just vision and determination, or a great product, or a new way of doing things. Being a visionary entrepreneur is not enough if you cannot excite a team of people to share in your vision and turn it into reality. There are countless seminars and books which repeat the adage that people are a company's most important asset. But, how many businesses seriously regard the development of their people as central to their success? How many make the investments to nurture their people's critical business knowledge and skills, and indeed armed them with the strategic thinking and soft skills to transform knowledge into ideas and innovations?

Human Capital a Key Competitive Advantage

Although I am no longer the Manpower Minister, l cannot let this opportunity pass without urging this assembly of top business leaders to work closely with government to enhance our human capital management. The Manpower Ministry is about to launch a Continuing Education and Training or CET statutory board. But for the Board to succeed in its mission, it will need the wholehearted support and cooperation of the corporate sector. In particular, private sector participation to develop industry-specific training programmes can make a big difference. We have built up over the years a strong culture of employer-based training. This will continue to be the mainstay of our national CET strategy. It is not the Government's intention to take over employers' responsibility to develop their workers. What we can and will do, is to provide companies with an expanded and more comprehensive CET framework to nurture your own human capital. We will work with you to foster an innovative, creative and highly skilled workforce to power your enterprises.

Restructuring the Wage System

Let me now move on to another equally urgent issue. This is restructuring our wage system. As cost conscious entrepreneurs and businessmen, you must be well aware of the shortcomings in our rather inflexible and seniority-based wage system. Time does not permit me to go into the history and details this evening. I just wish to point out that in this year's NWC deliberations, there was clear consensus that we need a more flexible and performance and productivity based wage system. Hence the NWC recommended speeding up the pace of wage restructuring to narrow the salary maximum to minimum ratio to below 1.5. This was to ensure that older workers receive wages closely related to their performance and productivity rather than just on account of their seniority. Even more striking was the NWC recommendation to employers to use part of the basic wages to build up the Monthly Variable Component. These measures had the full support of the trade unions. The union leaders had noted that the new globalised economy and emergence of new competitors, such as China and India, imposed a greater urgency for Singapore companies to change gears, rethink business model and look for new opportunities. So they are more than willing to persuade their members to accept the need for wage restructuring.

Hence I was rather surprised to read in the ST recently, that eight in ten companies surveyed by MOM had indicated they did not wish to adopt the MVC or claimed to be unaware of its existence. Here, we have unions supporting a conversion of a portion of the basic wage to a flexible component which can be reduced when companies face difficulties. Yet companies which can benefit are uninterested in what can be a survival measure. Why? According to some companies, because it will make their wage structure too complex. So they prefer to keep it simple, even if by doing so, they run the risk of going out of business. I am perplexed by such attitudes. I hope the real reason is not because companies find it easier to just retrench surplus or overpaid older workers, than to build up an MVC which can be adjusted to reduce or delay the need for retrenchment. So tonight, I would like to urge this assembly of distinguished CEOs and entrepreneurs, to take another look at your companies' wage structure. On Monday when you get into the office, please ask your Director of HCM or HR Manager, whether he or she is aware of the MVC and how relevant it is to your operation. And while you are at it, please also ask him about the seniority-based wage system and what are his plans to narrow the gap. If we don't make these adjustments now, we will face increasing difficulties surviving business competition. In particular, our older workers will become more vulnerable to retrenchment and long-term unemployment. This restructuring process will be painful, particularly for the workers. But if we make these adjustments now, we can avert the pain of more retrenchment and higher unemployment. The wage flexibility will enable more companies to survive this difficult period and reposition themselves for the recovery.


To conclude, we are facing difficult economic challenges and stiff competition. In this new business environment, we need continued investment in our human capital and a drastic revamp in our wage structure. The Government will invest in a world-class CET infrastructure. We will support entrepreneurs, CEOs and human capital managers in companies at all levels, from MNCs to SMEs, to revitalise our workforce, equip workers with new skills in demand and help companies to compete successfully. On wage restructuring, the NWC has paved the way. You and fellow business leaders must now take the lead. Yes, the going is tough. But that is when the tough must get going.

Tonight, we recognise three outstanding leaders in business. The Award Recipients are the tough ones who have already got going. To them I say: You are among many business leaders who have taken a strategic and personal interest in enhancing human capital management within your organisations. You are pioneers in developing, within the DNA of your companies, a strong HCM culture. I congratulate you and wish you even greater success in the years ahead.

Ladies and Gentlemen, I wish you all an enjoyable evening. Thank you.

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