Today, the Centre for Investor Protection released Part 2 of the analysis of Income Insurance. While Part 1 released earlier focuses on Income Insurance’s corporate governance, financial reporting and performance before the Allianz offer, Part 2 focuses on issues that arose following the Allianz offer.

Coincidentally, today, Income Insurance issued its Notice of AGM for FY 2024 to be held on 24 June 2025. It has been reported in the media that Income Insurance’s Chairman is stepping down after 7 years although he will remain on the board of NTUC Enterprise (NE).

Both parts 1 and 2 raise issues about the board of directors of Income Insurance, and part 2 includes an extensive discussion of the conflict of interest involving the Chairman, whose firm Morgan Stanley, was acting as financial advisor for Income Insurance for the Allianz deal. When the issue of conflict of interest was raised, the response from Income Insurance was that he had recused from the decision to appoint Morgan Stanley as financial advisor.  As explained in Part 2, MAS Corporate Governance Guidelines state that a director with a conflict of interest should also recuse from discussions on the matter. Income did not say whether this was done.  I had also mentioned in posts about the multi-faceted nature of the conflicts that cannot simply be addressed by a recusal from the decision to appoint Morgan Stanley.  This is analysed in greater detail in this report, including the issue of conflict of interest from Morgan Stanley’s perspective.

I hope that with the Chairman retiring, Income will take the opportunity to appoint an independent Chairman, someone who is not affiliated with NE or other NTUC entities. Further, I hope that this new Chairman will bring with him or her a strong social sector/social enterprise background.

In the coming AGM, nine of the 12 directors are seeking re-appointment. As I mentioned in Part 1, Income Insurance should consider reducing its board size and reconstituting its board. Most of the current directors were directors when Income Insurance was a co-operative, and they were elected to represent certain members, with most of them representing the Founder Member, NTUC. In my view, they should not have been considered independent directors then because they were representing certain members. Bringing in new directors with a better balance of competencies and without a legacy relationship with certain members should be considered.

The two reports are published by the Centre for Investor Protection because Income Insurance has shareholders (and other stakeholders), and there are issues relating to corporate governance and investor protection. As the author of both reports, they represent my views, and not the views of the Centre or other organisations affiliated with me.

The latest report can be downloaded from the Centre website here: https://bschool.nus.edu.sg/cip/articles/broken-allianz-with-income-part-2/