View From the Top: why Singaporean banks prefer foreign CEOs

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Our columnist is a senior banker based in Singapore, with three decades in commercial and investment banking at major international firms. If you haven't read his other columns, click here,

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After a couple of drinks at Harry's in Boat Quay, a few veteran banker friends and I struggled with some possible reasons why two (DBS and OCBC) of the three Singaporean banks have expatriate CEOs.

Only one firm (UOB) has a local person at the top, but oddly enough, some of the larger global foreign banks which have substantial operations in Singapore - Standard Chartered, ANZ, Deutsche Bank etc - have instead relied on domestic talent as their local/regional CEOs.

Let's speculate (partly "tongue in cheek") on some possible reasons for this apparent anomaly and of course why many believe that local CEOs would have performed just as well. Here's what the old bankers at Harry's had to say...

1) We were told to do it

About 15 to 20 years ago, the Singaporean government announced that our top companies should make great efforts to recruit foreign CEO talent. These professionals would contribute their vast international experience and help accelerate the development of our local companies towards attaining world-class status. Many banks fell over each other to the heed the call.

Fast forward to 2010 and plenty of well-informed Singaporeans do not think that the two local banks who hired foreign CEOs are even close to being global brands. They are at best considered regional leaders. By contrast, our only recognised world-class company, Singapore Airlines, was managed for many years by a localised and nationalised Malaysian-born CEO and is presently run by a Singaporean.

And it is also ironic that many of our foreign banking leaders were hired from banks which are now considered "bailed-out" class.

2) Style, charisma and PR skills

Many Singaporeans believe that foreign educated/trained CEOs are more charismatic leaders and bring more style and public relations skills to the table. Singaporeans on the other hand, are usually thought of more as technocrats and bureaucrats than leaders.

But it seems that few people recognise the fact that the local CEOs of foreign banks in Singapore have earned their stripes the hard way by competing in global banks for top positions against a wide mix of internationally-talented cohorts. It is hence surprisingly that local banks cannot seem to find the necessary CEO skills required from this group of local bankers.

3) Small country syndrome

Many of us in the banking world believe there is an element of colonial vanity at play in the decision to hire overseas talent. Some of our older generation appear to relish the fact that some of these foreigners will report to them.

In addition, choosing a top local talent as CEO can be quite a controversial move in a small place like Singapore and may invoke feelings of jealousy, and accusations of favouritism.

Ironically, some talented Singaporeans often get a more level playing field when working for and competing in a foreign bank.

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