Building lasting value at CDL Singapore


Building lasting value at CDL Singapore Ethical BoardroomBy Kwek Leng Joo – Deputy Chairman and Executive Director of City Developments Limited.




The global financial crises in past years have exposed flaws in the regulation of many businesses and led to heightened focus on the need for strong and effective corporate governance. Global warming and climate changes, which may have been wrought through human influence, have also intensified the calls for sustainable and responsible practices.

Singapore, like many parts of the world, has seen increasing demands for greater accountability and transparency, fuelled by stakeholder expectations resulting in public pressure and tightened legislation.

City Developments Limited (CDL) is a property and hotel conglomerate listed in Singapore and one of Singapore’s largest companies by market capitalisation. As Singapore’s property pioneer since 1963 with an impressive track record of having developed more than 36,000 luxurious and quality homes across diverse market segments and one of Singapore’s biggest landlords, CDL has over the past 50 years been committed to continually create value for our investors and stakeholders. Our focus on the triple bottom line has spearheaded our efforts to develop the right mix between financial and ethical performance, environmental stewardship and social engagement. Strong corporate governance and sustainability are thus integral pillars of our business, helping us to build trust, strengthen our brand equity and create lasting value.

Today, with an extensive network of more than 400 subsidiaries and associated companies under its wings, CDL owns and manages a solid portfolio of residential and investment properties, including  more than 120 hotels worldwide that are owned, asset managed and/or operated by our London-listed subsidiary, Millennium & Copthorne Hotels plc (M&C). Our network spans 91 locations across 25 countries in Asia, Europe, the Middle East, North America and New Zealand/Australia.

Strong leadership commitment and corporate DNA

CDL is committed to maintaining good corporate governance and business integrity in all our business activities. This is also reflected in our public statement of support made since 2010 together with other like-minded Singapore corporations, to uphold high standards of corporate governance to enhance shareholder value. We strongly believe that practicing good corporate governance is central to the health and stability of our financial markets and economy.

This commitment has shaped a corporate DNA culture of responsibility and accountability stemming from the Board down to our employees, with a system of checks and balances embedded at all levels of the organisation. Our Code of Business Conduct and Ethics and other corporate policies on corruption and fraud crystallise our business principles and practices on matters with ethical implications, including our ‘zero-tolerance’ stance on corruption, and provide a communicable and understandable framework for employees to observe honesty, integrity, responsibility and accountability within CDL and in their dealings and relationships with our stakeholders, customers and suppliers.

Our corporate governance framework enables the Board to provide leadership, set broad policies, approve strategic objectives and ensure that necessary financial and human resources are in place for CDL to meet its objectives. The effectiveness of such a framework is largely dependent on the commitment of the Board and the Management. With a Board comprising more than 60 per cent majority independent directors from diverse backgrounds with real estate, hospitality, financial, legal and business management expertise, there is a clear independent element in the Board’s oversight of CDL’s business and the activities of the Audit & Risk Committee, the Nominating Committee, the Remuneration Committee and the Corporate Social Responsibility & Corporate Governance Committee.

We believe that a well-functioning and effective board that is diverse in its core competencies will enhance decision-making by harnessing the variety of skills, industry and business experiences, culture and geographical background of the directors. To this end, CDL has put in place processes for Board selection and renewal, annual Board performance evaluation and has also invested in continual training and development of its directors.

The Board recognises its overall responsibility to ensure proper financial reporting and the effectiveness of the group’s risk management system and internal controls, including financial, operational, compliance and IT controls. With delegated authority from the Board, the Audit & Risk Committee works closely with Management, which has established a formal risk management framework that allows for a structured and consistent process to identify, assess, evaluate, monitor and report risks. This risk governance structure is regularly reviewed against international standards and best practices in risk management to enable CDL to improve its risk management monitoring and control capabilities, improve operating systems to allow for  adequate and timely delivery of information and to embed more deeply risk management processes into CDL’s culture and business operations.

Conserving as we construct

In the 1990s, the building industry was considered to have caused a negative impact on the environment and perceived as ‘destroying before constructing’. The building sector accounts for 40 per cent of energy consumption and 30 per cent of greenhouse gas emission globally. This was a material risk to our core business as a real estate developer. There was, therefore, a real need for our industry to undertake greater environmental responsibility and mitigate the impact of our activities on the environment. We firmly believe that developers can and must make a difference in the way we operate by exercising greater environmental stewardship.

Since 1995, ‘Conserving as we Construct’ became our ethos. At the operational level, we adopt a three-pronged approach: 1) designing and developing sustainable properties as a developer; 2) managing buildings in a resource-efficient way; and 3) engaging and influencing stakeholders to support our commitment to responsible practices as a caring corporate citizen. CDL also has a Climate Change Policy in place and has pledged to achieve low carbon operations with reduction targets set at 22 per cent in 2020 and 25 per cent in 2030, in line with the Singapore government’s vision to make Singapore a ‘climate resilient’ city.

Over the past two decades, we have continuously innovated, invested in and improved on the way buildings sustain life. We have helped to green Singapore with more than 80 Green Mark buildings, championing sustainable development. We are glad to have put Singapore on the global sustainability map as the first Singapore company to be listed on three leading sustainability benchmarks in the world: FTSE4Good Index Series (since 2002), Global 100 Most Sustainable Corporations in the World (since 2010) and Dow Jones Sustainability Indices (since 2011). In the Channel NewsAsia Sustainability Ranking 2014, CDL was named Top Property Developer in Asia, Top Singapore Corporation and second among the top 100 sustainable companies across 10 key Asian economies. CDL is also a founding member of Global Compact Singapore Network and one of the pioneer Singapore signatories of the United Nations Global Compact to lend support to the advancement of responsible corporate citizenship in Singapore.

Going beyond legislation

As part of CDL’s commitment to create lasting value for stakeholders, we have always believed in sustainability reporting as an effective tool to measure, improve on and benchmark our Environmental, Social and Governance (ESG) performance. Thus, we have long adopted a proactive approach to sustainability and governance reporting and moved beyond regulatory compliance for such practices and reporting. In 2008, we voluntarily published Singapore’s first Global Reporting Initiatives (GRI)-checked dedicated social and environmental report. In 2012, we became the first Singapore developer to receive GRI Level A+.

With Singapore Exchange’s announcement in late 2014 of its plans to increase transparency with sustainability reporting for all listed companies on a ‘comply or explain’ basis, CDL’s proactive and pioneering efforts have enabled us to enjoy first-mover advantage. Environmental-related regulations and requirements that have been progressively mandated for listed companies and for the property development sector in Singapore have had little business impact on CDL’s operations as we set new sustainability benchmarks.

“We strive to complement Singapore’s vision to be a clean, green, sustainable and smart nation”

With the publication of each progressive report, we strive to improve on our ESG performance, close in on gaps and enhance the quality of disclosures. For our latest 2015 sustainability report, CDL is the first property developer in Singapore to adopt an Integrated Reporting (IR) approach. Based on the International Integrated Reporting Council’s (IIRC) Framework, this approach provides for a more meaningful and all-round corporate reporting. Centred around six capitals – Financial, Manufactured, Organisational, Social and Relationship, Human and Natural – this IR approach aims to present a holistic picture to CDL’s investors and stakeholders on how the interrelation between CDL’s business and sustainability performance leads to value creation over the short, medium and long-term.

Looking ahead

With the Board’s oversight of CDL’s CSR and corporate governance issues and its endorsement of CDL’s sustainability efforts to seize opportunities while mitigating its risks, we see unlimited possibilities to create a lasting and positive impact on our stakeholders, the community and the environment. We hope to create stronger brand equity, product differentiation as well as investor and consumer value.

2015 marks 20 years of our CSR journey.  As we enter the next chapter of our journey, our focus is to ‘Create Future Value’ for generations to come, building upon our ethos of ‘Conserving as we Construct’. By harnessing our capitals, we strive to complement Singapore’s vision to be a clean, green, sustainable and smart nation.


About The Author:

Appointed as a Director of CDL on 8 February 1980, Mr Kwek assumed the position of Deputy Managing Director in 1987 and held the role of CDL’s Managing Director from January 1995 until his appointment as Deputy Chairman on 17 February 2014. Mr Kwek was last re-elected as a Director on 23 April 2014. He is also the Chairman of CDL’s Corporate Social Responsibility & Corporate Governance (CSR-CGC). He is an Executive Director of CES and a non-executive Director of HLF.

Mr Kwek has been a dedicated advocate of CSR for over two decades, and his vision has established CDL’s reputation as a leading green building champion and a forerunner in CSR, raising the bar for Singapore’s real estate industry and driving change for the building sector. To raise the importance of CSR in the business community in Singapore, Mr Kwek was elected the President of Singapore Compact for CSR, which is the national CSR society and local network for the United Nations (UN) Global Compact. Mr Kwek emerged joint winners together with Mr Kwek Leng Beng, as “Partners in the Office of the CEO” in the Brendan Wood International – SIAS TopGun CEO Designation Award given out at the SIAS Investors’ Choice Awards in October 2012. This Award is accorded to CEOs who are best in class as rated by shareholders.