The DNA of Temasek

We peered into an uncertain future, defended the discipline of the market, debated our rightful role regularly, and charted our own path.”
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This neatly sums up the early years of Temasek, but girding that journey is the steel of the Singapore DNA. That is the precious and strong foundation laid by our pioneers, in and outside of Temasek.

1959 saw the first year of self-government in Singapore. The newly elected neophytes were dismayed to inherit a budget deficit of S$14 million from their colonial predecessors. These young leaders went to work with steely determination; and by year end, the Government delivered a S$1 million surplus, through sheer will and collective sacrifice.

This early financial discipline set the tone for Singapore ever since. There was a determination to not burden future generations with debt. This shaped the Singapore DNA of integrity, courage, commitment to a sustainable future, and an eye on reality.

In 1965, a newly independent Singapore found itself bereft of a large hinterland overnight. Barely two years later, Britain announced the withdrawal of military forces, to be completed by 1971. Singapore’s largest employment source, an industry accounting for 20% of GDP, would soon vanish.

Even amidst a desperate drive to create jobs, Singapore heeded the lessons from pollution-choked cities in the developed world. In 1970, an Air Pollution Unit, reporting directly to the Prime Minister, was established. The Government steadied its resolve to ensure development was sustainable; it was prepared to lose investments which did not meet strict environmental standards. To champion a garden in a city, an Annual Tree Planting Day was also formalised in 1971.

Nine years into independence, the Government found itself owning a smorgasbord of businesses; many born out of the desire to create jobs. Some were large – a bank, a shipping company and an airline. Others included a zoo, a hotel, a detergent maker and a chicken essence producer.

The Government took the view that it was not its business to manage shareholder minutiae for commercial companies. And so in 1974, Temasek was formed: an experiment out of necessity, to take over this mixed bag of 35 companies. This ensured a clear separation between the Government’s role as policymaker and regulator, and that of Temasek as the commercial owner and shareholder of companies.

It is a distinction that prevails today, 43 years later.

Temasek’s DNA is rooted in our nation’s early years. Our ethos was thus shaped – to be financially disciplined and to live within our means; to drive commercial growth alongside a healthily green environment with clean waters; to do the right things today with tomorrow in mind.

From the start, the Government took a hands-off approach. Our portfolio companies, even then, were subject to market discipline. The board and management team of the then young start-up, Singapore Airlines, knew that the company had to be profitable or face winding up. Indeed, a handful of ailing companies were shuttered.

The message was clear: companies needed to stand on their own, be agile, and embrace a culture of accountability and responsibility. This ethos of market discipline is alive and well today.

Our Temasek DNA guides our people. Meritocracy and Integrity are our watchwords. We want to build an institution of dedicated professionals with good hearts and clear heads, who think and act as owners and stewards, beyond their own tenure. We care that our people can grow with Temasek and with our wider community.

This is our ownership mindset. Our remuneration philosophy also reflects our purpose and passion for what we do. A substantial part of our incentives are deferred for as long as 12 years. If our returns are not sustained, our people share the pain – their deferred bonuses are clawed back.

Just as no person is an island, we are part of a larger community. We were born out of Singapore’s early challenges. We grew alongside its development, which, in turn, benefited from global trade and trends.

Our communities have allowed us to share in their growth. It is our rightful responsibility to share our successes with them. Since 2004, we have been setting aside part of our excess returns for community contributions. Today, we have six Foundations overseeing 17 philanthropic endowments, to build people, build communities, build capabilities, and rebuild lives.

Together, we strive for an Active, Beautiful and Clean (ABC) World – an Active, robust Economy supporting jobs and opportunities; a Beautiful, inclusive Society for peace and harmony; and a Clean, cool Earth as our common home, and for our future generations.