for example, directors of bp have been sued by shareholders over the costs associated with the oil spill in the gulf of mexico. directors of aig were also sued for not adequately monitoring the firm ’ s exposure to the subprime mortgage market. 9. directors should not become defensive or legalistic in face of these challenges. instead, they need to equip themselves with the appropriate skills and knowledge, to enable them to ask the right questions and make the right decisions. apart from experience, training is one important way to equip our directors. current levels of directors ’ training 10. companies here are gaining awareness of the importance of having well - trained directors, and proactively providing training for them. last year, sid and the singapore exchange, or “ sgx ”, published the “ singapore board of directors survey ”. according to the survey, the proportion of companies providing relevant training to non - executive directors increased from 25 % in 2005 to 41 % in 2008. but the survey also showed an increase in the number of directors who received no training. this is a trend that sid should address early. 11. i understand that sid and sgx are currently conducting another similar survey. hopefully, this survey will show more companies providing training for their directors and more directors attending such structured training. areas for focus 12. next, allow me to outline some areas where directors can focus their training efforts on. the sid and sgx survey highlighted that risk management was the most important area for further training. directors have a responsibility to manage the risks of a company. their involvement in risk management extends from heading off cases of egregious fraud, to ensuring that management does not take on excessive risk. 13. directors also need to stay abreast of the latest developments in regulations and best practices. to this effect, companies should put in place continuing training programmes for their directors. 14. mas has recognised the importance of this by proposing new provisions on “ continuous development ” in the corporate governance regulations and guidelines for locally - incorporated banks and significant life insurers. 15. the proposed provisions require the boards of such companies to establish a continuing development programme for all directors, and a framework to identify relevant skills for such directors. nominating committees should assess at least once a year, whether directors lack any skills to perform their roles. 16. besides getting the right training, directors must set the right tone for the company ’ s culture. core values like honesty, integrity and fairness which underpin

many people have entered the stock market in a short time is not entirely a good thing. besides the losses they may incur and thereby run into financial difficulties, there is a risk of the stock market functioning less well because prices bolt from more fundamental levels. an example of this is the it bubble in recent years. the ease with which firms attract capital in an over - valued market leads to misinvestment which, if it becomes too prevalent, can be harmful for society in general when the economy and the stock market both turn downwards. the behaviour of inexperienced investors is thus a general economic issue. the american study argues that firms, banks and analysts had incentives to talk inexperienced people into investing in new enterprises on grounds that were not entirely sound. many new technology companies were not generating a profit and had to rely instead on paying for wages and equipment by issuing shares. for this to be feasible, stock markets need to be high. in this sense there were incentives for managements to trim reports and statements about their firm ’ s future profits. at the same time, analysts and investment banks, with potential earnings from launching share issues, lacked incentives to take a critical look at these reports and statements. inexperienced investors did not get the assistance and support they needed. as a sign of this, the paper mentioned that in summer 2000 professional analysts were summoned to washington for a congressional hearing on their market recommendations. the results showed that in the period before the nasdaq index fell as much as 60 per cent, less than 1 per cent of the recommendations had been to sell. the media subscribed to the exuberant mood with reports of rapidly rising share prices and the notion that quick money could be earned in the so - called new economy became the conventional wisdom. in retrospect we know that while share prices for it and other new companies did rise rapidly for a number of years, they could also fall very quickly. could there be a better illustration of a financial market bubble? here i want to call for studies like those in the united states to throw more light on whether and, if so, to what extent there were also similar tendencies in sweden. for the time being we shall have to make do with occasional observations and more anecdotal information. there is little doubt about the swedish stock market also being feverish in the late 1990s, with many inexperienced newcomers. as far as i know, a good many companies were operating at a loss and issued shares. neither did i detect a massive