Temasek’s Goodyear is Rolling

Ashby Monk

If you haven’t been following the internal debate going on in Singapore over the appointment of the first foreigner — Charles Goodyear — to run Temasek, you should start. As I mentioned in a previous post, many SWFs are increasingly hiring foreigners and the influence of these individuals remains a concern in some countries. In Singapore’s Parliament last week, the Goodyear appointment was raised:

“Is the government not worried that the national interest could be jeopardised by having a foreigner CEO who will have a complete overview of Temasek’s strategy and operations?”

The answer appears to be ‘No’. Goodyear will undoubtedly be subject to countless contractual provisions that ensure his interests fit with the interests of the Government of Singapore. Moreover, there are clear benefits to bringing in an outsider.

The obvious benefit is that Goodyear — like the many other foreigners working for SWFs — will bring important skills and knowledge perhaps not readily available in Singapore. However, there is another benefit. By hiring individuals seen to be ‘trustworthy’ in the West — he previously ran the world’s largest mining company — SWFs can acheive international legitimacy. I don’t want to get overly academic here, but an institution can gain legitimacy in a certain jurisdiction by bringing within the organization individuals already seen to be ‘legitimate’ in that jurisdiction. This is known as legitimation through cooptation; and it is a pretty smart move.

So, hiring Goodyear as CEO may fit perfectly with Singapore’s global interests.

1 Response to “Temasek’s Goodyear is Rolling”

  1. 1 Risky Business « Oxford SWF Project Trackback on July 20, 2009 at 1:46 pm

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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