Speeches

Creating Value

Lord Alistair Darling, Chair of the Board of Trustees of IVSC,

Mr Chaly Mah, Chairman of SAC,

Mr Harsha Basnayake, Chairman of IVAS Council,

Distinguished guests,

Ladies and gentlemen,

Good morning.

1. Thank you for inviting me to the IVAS-IVSC Business Valuation Conference 2020. It is a great pleasure to be here today.

2. This year’s conference theme is “Crisis and Sustainability: The Search for Enduring Value”.

a. A pertinent theme as the world is facing its worst economic crisis since the post-World War II economy. The International Monetary Fund (IMF) forecasts that the global economy will contract by 4.9 percent in 2020.

b. COVID-19 will transform the business environment, and this is already happening. It will bring lasting changes to business models. COVID-19 has accelerated the digital revolution. According to McKinsey estimates, COVID-19 has vaulted us forward by five years in consumer and business digital adoption.

3. This means intangible assets will grow in prominence, and this in turn means that demand for valuation of intangibles will grow.

4. We therefore increasingly need high quality valuation services to help our companies quantify the value of their assets.

5. Today, I would like to focus on how business valuers can work smart, to create value for your clients.

6. One lesson of past crises is that crises create new possibilities.

a. According to research by McKinsey, in the eight years immediately following the 2008 Financial Crisis, the top quintile of companies extended their lead over their peers, in terms of cumulative total returns to shareholders, more than seven times.

b. We should expect there will be opportunities for the proactive and the agile to outperform in the post-COVID-19 world.

7. Businesses should therefore position themselves to take advantage of the new opportunities. Work smart to create value with the necessary knowledge and skills.

a. This will put you at the forefront of identifying and understanding the opportunities that come your way, to create value for your clients.

b. Determine the unmet needs of the market, brainstorm solutions, and test them to see which are the most attractive to your customers.

8. Using technology will allow you to exploit the new opportunities that will surface. Look for the ones that will increase your productivity and enable you to create more value for your clients. Consider how you can use technology to enhance business resilience and continue to value-add in times of disruption.

a. An example of a firm that has harnessed new technologies to improve productivity and free up time for new opportunities is Precursor, from the accountancy sector. Using SmartCursor as its Client Relationship Management tool, Precursor is able to track and follow up on leads using analytics. This reduces time spent on churning out internal reports; time which can be invested in capturing new opportunities.

b. During the COVID-19 Circuit Breaker in Singapore, we saw many firms going digital to ensure business continuity, with the transition to working remotely and serving customers online.

c. Likewise, business valuation firms can explore adapting technologies in your valuation processes to improve productivity, create new value, and free up time to pursue new opportunities.

9. Partner the Government and others.

a. Here in Singapore, part of our work is to prepare for the future economy and to catalyse economic transformation. To that end, we had grouped key industries into six economic clusters as part of our economic transformation. But in doing so, we quickly realised that many emerging opportunities actually fall in the adjacencies between sectors.

b. So I would encourage business valuers and business valuation firms to work in tandem with partners from other sectors, so that you can capture these new opportunities and create value. Intangible assets are an example that comes to mind.

c. Even before COVID-19, intangible assets were fast becoming key value drivers in the global economy. The pandemic has further accelerated digitalisation and innovation. This will drive the growth of intangible assets and make valuation of such assets increasingly important.

d. But the efforts of business valuers alone will not be sufficient to capture this opportunity to its fullest extent. You would need to work with relevant intellectual property experts in order to do so.

10. Many business valuers and business valuation firms are already working smart to create value.

a. For example, Vallaris Deal Advisory Pte Ltd has been using digital tools like: infrastructure and tools like analytics, QR code payment, cloud and webinar platforms, to increase business resilience and productivity, and to transit to new ways of working. During the Circuit Breaker, Vallaris was able to continue operations by transiting to work-from-home operations smoothly. This enabled Vallaris to continue adding value to its clients, notwithstanding the Circuit Breaker.

b. Similarly, Chairman of IVAS Council, Harsha, has shared many stories of individuals that have used the Chartered Valuer and Appraiser programme, or CVA programme for short, to equip themselves with the knowledge and skills needed to capture new opportunities. Ms Yeap from iGlobe Partners, who leveraged on the CVA programme to equip herself with the skills needed to transit from a career in audit to a career in business valuation, is an example that comes to mind.

11. I also urge you to partner the Government in the quest to create value.

a. At the macroeconomic level, the national Emerging Stronger Taskforce is examining strategies we should adopt, to do even better post-COVID. They are also looking to partner groups and organisations for concrete and tangible action to be taken through the Action Networks on the next steps needed in the post-COVID-19 world.

b. Recent Singapore Budgets have also included initiatives and schemes to help our workers to adapt and transform, and our firms to digitalise and to use new technologies.

c. At the sector level, I am happy to highlight that there is much work-in-progress to help business valuers work smart to create value.

i. To strengthen Singapore’s value proposition as a regional and modern services hub, the Government has begun work on the Singapore Intellectual Property Strategy 2030, or SIPS 2030, for short. SIPS 2030 is a national effort to guide the on-going development of Singapore as a global intellectual property hub. One of the key thrusts of SIPS 2030 is to build Singapore as a trusted and credible hub for intangible asset valuation.

ii. IVAS will also continue to support business valuers by building new partnerships, that can help business valuers improve competencies and groom new talent.

d. We will share more about these initiatives at the appropriate junctures.

12. In conclusion, let me say: We live in volatile times. But there are new opportunities for growth and value creation. Plan for the future, work smart, and seize the opportunities.

13. Thank you very much and have a fruitful conference ahead.