SIGNIFICANCE OF SACKINGS
Mr Lai said that a decision to terminate three senior executives simultaneously indicated that the board perceived the issue to be “irreparably egregious”, and that retaining the trio would have been “untenable for the company”.
“Such a decision must be carefully conceived and undertaken by the board due to the severity of the consequences, especially when it becomes publicly disclosed,” said Mr Lai, who added that the move may lead to customers and investors losing confidence in the company.
On the flipside, NUS’ Prof Loh described the decision as “decisive corporate governance action against management lapses” that could serve to strengthen confidence in the board, as it proves that the board has oversight over its management.
“This is a case where corporate governance trumps management,” he said.
SingPost’s past setbacks may also explain its decision, Prof Loh said. SingPost has been fined previously for service lapses and was issued a stern warning in 2019 after a postman with special needs dumped unopened mail.
“At the broader level, SingPost has suffered various incidents of service lapses, or even errant postman behaviour in recent years, so I think there’s a need to send a signal that credibility is a very important factor for this business,” said Prof Loh.
In 2019, SingPost was fined S$100,000 (US$74,000) for failing to meet service standards.
The lapse occurred in May 2017, when the postal service provider did not meet the minimum requirement for the delivery of basic local letters within the central business district by the next working day.
That year, SingPost also failed to achieve the targets for the delivery of basic letters and registered mail across several months.
“The critical issue is (the organisation’s) … nature where service culture, trust in delivery is fundamental to the business,” Prof Loh added.
NTU’s Assoc Prof Law said SingPost’s case highlighted the need for companies to have “formal, robust internal process” for whistleblowing.
“Companies should review their reporting channels and internal control systems. For companies that do not have one, maybe they should consider implementing a robust and formal platform for handling internal feedback and concerns,” he added.
