What allows a Ferrari to go fast?
A powerful engine? Of course. But would you dare to drive at 200 kilometres per hour if the car had no or ineffective brakes? Probably not.
In fact, the faster the car, the more important the brakes become.
Good brakes don't make the car slower.
Good brakes give you the confidence to go faster.
And that is exactly how I see corporate governance.
Many businesspeople think governance is there to slow them down. More rules, approvals, questions, paperwork.
I see it differently.
Corporate governance is the brakes that allow a business to go faster and safely.
And when governance fails, even a powerful company can crash.
Let me give you a Singapore example.
Many of us remember Hyflux Limited. At one time, Hyflux was one of Singapore's great entrepreneurial success stories. Started in 1989, it grew from a small water-treatment business into an international company that spans operations in Singapore and Middle East.
Its founder, Olivia Lum, became one of Singapore's best-known entrepreneurs. Investors believed in the company.
Then came the $1.3 billion Tuaspring project in 2011 that turned Hyflux from hero to zero.
Tuaspring was not simply a water project. Its economics depended heavily on selling electricity from an integrated power plant. The integrated plant suffered severely from a severe oversupply and collapse in Singapore's wholesale electricity prices. Hyflux made hundreds of millions of losses. Eventually, Hyflux entered court-supervised restructuring in 2018 and was liquidated in 2021. Many investors suffered substantial losses.
But here is the corporate governance question I want us to think about:
Where were the brakes?
Hyflux had a board of directors. Under Singapore's listing rules, independent directors, directors that are independent in relationships, character, conduct and judgment, must made up more than half of the board of directors when the Chairman is not independent. Hyflux had all its directors independent except the CEO Olivia Lum.
On paper, Hyflux had good corporate governance, even exceeding the SGX requirements. Then why it failed?
Governance is not about having brakes on the car.
Governance is about whether the brakes actually work when you need them.
That distinction became painfully important.
Four former Hyflux independent directors went on trial in 2025 alongside Olivia Lum and the former CFO over alleged disclosure failures concerning Tuaspring. Another former independent director, Rajsekar Kuppuswami Mitta, pleaded guilty to a charge of neglect, was fined S$90,000 and barred from holding directorships. The remaining proceedings should, of course, be treated according to their legal status rather than assuming guilt.
The lesson for directors is powerful:
An Independent Director cannot simply be independent in name.
He or she must be independent in mind.
Sometimes the most valuable contribution a director can make is to ask:
“What are we missing?”
“What happens if our assumptions are wrong?”
And perhaps the hardest question:
“Should we really be doing this?”
The Three Brakes of Corporate Governance
This brings me to my main idea.
Corporate governance is much more than complying with laws, regulations and SGX requirements.
To me, good corporate governance provides three brakes that actually help the business accelerate.
Brake 1: RISK — Protect What You Have
The first is Risk Management.
Every business wants growth. But every growth strategy creates risk.
New markets, New technology. AI. Acquisitions. Borrowing. Major investments.
The board's job is not to say: “Don't take risks.”
If we take no risk, we may have no business.
The board should ask:
“What risks are we taking, how much can we afford to lose, and what happens if our assumptions are wrong?”
Think again about Hyflux.
The question was not simply whether Tuaspring was a good project.
The deeper governance question was:
What happens if the electricity-market assumptions don't work?
Good governance stress-tests the dream before reality stress-tests the company.
That's Brake Number One: Risk.
Brake 2: ACCOUNTABILITY — Ask the Questions Others Don't Ask
The second brake is Accountability.
Management manages. But the board governs. There is a difference.
A good Independent Director is not there simply to agree with management.
Neither is the Independent Director there to fight management.
The role is to provide constructive challenge.
- Ask questions.
- Challenge assumptions.
- Look beyond the PowerPoint slides.
- Understand the numbers.
And when something doesn't make sense, have the courage to say:
“Please explain this again.”
Sometimes everybody around the board table is highly intelligent. That can actually create another danger. Everyone assumes somebody else has asked the difficult question.
Corporate disasters don't always happen because nobody knew anything. Sometimes they happen because everybody knew something—but nobody connected the dots.
That's why accountability matters.
Brake 3: TRUST — Make Money Easier
And the third brake is perhaps the most valuable:
Trust.
- Why would an investor put money into your company?
- Why would a bank lend to you?
- Why would a supplier give you credit?
- Why would a good executive join you?
Because they believe they can trust you.
Good governance creates transparency. Transparency creates confidence. Confidence creates trust.
And trust reduces friction.
- When people trust your company, decisions can move faster.
- Capital can become easier to access.
- Partners can become more willing to work with you.
- Talented people can become more willing to join you.
So governance isn't only about preventing losses.
Governance can create value.
That is why I describe it this way:
Risk protects value.
Accountability improves decisions.
Trust creates value.
And together, they allow the company to accelerate.
Test Your Brakes Before You Need Them
So let me leave every director and business leader here with one question:
How good are your brakes?
Not:
“Do we have an Audit Committee?”
Not:
“Do we have Independent Directors?”
Not even:
“Are we compliant?”
Ask instead:
If management makes a major strategic mistake tomorrow, will our governance system detect it early enough?
Because when the car is travelling slowly, weak brakes may not matter.
But as your company grows, as your investments become larger, as AI makes decisions faster, as your business becomes more complex...
your brakes must become stronger, not weaker.
The lesson from Hyflux is not that companies should stop taking bold bets.
Singapore needs entrepreneurs who dream big.
Companies need leaders who dare to move.
But the bigger the ambition, the stronger the governance must be.
**Corporate governance is not the enemy of entrepreneurship.
It is what makes responsible entrepreneurship sustainable.**
So don't appoint Independent Directors simply because the rules say you need them.
- Find directors who understand risk.
- Find directors who understand the numbers.
- Find directors who have the courage to ask difficult questions.
- And above all, find directors who know when to say:
“Go.”
When to say:
“Slow down.”
And, occasionally:
“Stop.”
Because the best Independent Director isn't the person who keeps stepping on the brake.
It is the person who gives the organisation the confidence to step on the accelerator.
Better Governance. Better Decisions. Greater Trust. Faster Growth.
That's why I believe:
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