SIME (4197) - GE to reduce Board members from 18 to 12 but Sime Darby is to triple its members?


A company should be concerned over over-representation, and General Electric which is going through tough phases of its business due to competition is going lean and one of its measure is to reduce its Board members from 18 to 12. It seems to me that having a heavy Board is a drag rather than being beneficial to an organization. From the announcement, it is also putting preference over having Board members that have relevant industry experience rather than sometimes "political appointees".

More Directors means more fees to pay and it may not be beneficial towards a company.

I see this as sometimes a CEO is working for the Board which can be over-zealous over directions of the company. A strong CEO will be able to work with a supportive Board while a weak CEO can be wrongly directed by directors who can have agendas of their own.

This is also sometimes what I find over family-controlled companies and as long as they act fairly towards shareholders, they can be not too bad.

This however points to me that with Sime Darby split into 3 different companies - Sime Darby the original, Sime Properties and Sime Plantation - in the short term, will this mean this conglomerate of our own be having expanded in terms of its Board members?

As I was reading through the announcement for Sime Darby, splitting into 3 could also means 3 different CEOs, 3 different CFOs, Chairpersons etc. That seems to be more of an issue to me than finding how is it that it can be more lean and focus.

I wonder with the split, will it be towards the better or worse?
At least, it is opportunities for Investment Banks and Bursa to make some fee income...