I’ve been going though the prospectus of JustCo, whose shares have fallen from its IPO price of 94 cents to 66.5 cents in less than 3 weeks.

With all these professionals, supposedly savvy investors and experienced directors involved, the corporate governance practices that the company has adopted are very disappointing. Do they not believe that good corporate governance matters at all? An IPO is the perfect opportunity for stewardship-focused cornerstone investors to push for good governance but it was not taken.

First, we have the founder holding the executive chairman and CEO roles. I have nothing against family businesses, but it basically is one, as he, his wife and brother are co-founders and his brother is chief commercial officer. Reducing the concentration of powers in one person should have been a priority in this company.

Second, two of the independent directors (IDs) are, or was recently, closely associated with GIC or its related entities, with long technical justifications given for one as to why he’s independent, when everyone I’ve asked, including a startup founder, said he can’t be independent. The Code’s stance about not simply ticking the boxes when assessing independence seems to be simply ignored. These directors would almost certainly not be considered independent in markets with higher standards. If the assessment of independence of IDs is based on stricter standards, JustCo would at best only have two out of its six directors being considered independent. This would mean it would not comply with the Code of having a majority of IDs if the Chairman is not an independent director. But now they can claim that this Code provision is complied with. On JustCo’s website, another non-independent director is wrongly listed as independent – unless he was deemed non-independent at IPO and has now magically transformed into an ID.

Third,  independence of directors is assessed by an NC chaired by the lead ID, one of those who is deemed independent despite being on the board of GIC, which has significant deemed interest. He recused on his assessment, but one of the other two members who assessed his independence is the executive chairman/CEO, who’s on the nominating committee (NC). Yes, in the Code, an executive director (ED) is allowed to be a member of the NC but again, it’s the lowest bar that’s followed.

Fourth, JustCo allows the NEDs to participate in their share-based incentive plans. That’s generally a no-no in most markets but again, we are not talking about good CG practices here.

Here’s a fun fact. The executive chairman/CEO won an EY Entrepreneur of the Year award in the Workspace Solutions Category in 2019 and EY is the independent auditor and reporting accountant.

Guess who also won EY Entrepreneur of the Year Award?  Adam Neumann, founder of WeWork. And the auditor? EY, who were heavily criticised over their work at WeWork.

I’m not saying that JustCo will be another WeWork but I don’t see it as being built on a strong CG foundation so I’m not optimistic about it.

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The views expressed here are the author’s personal views.