IN many aspects, you could call him anindustry veteran. After all, with about35 years of industry experience underhis belt, Desmond Teo has grown al-most simultaneously with Singapore’soffshore and marine sector.

But the novelty in his managementphilosophy and the boldness in his cor-

porate strategy suggest otherwise – his mod-ern and fresh approach has propelled GaylinHoldings (Gaylin) into an international playerin the rigging and lifting solutions segment.

What began as a small family-run tradingestablishment with just five employees in1974 is now a listed company with more than450 employees, with operations in nine coun-tries and a market capitalisation close toS$250 million.

Mr Teo, the executive director and CEO ofGaylin, believes that this transformation isbuilt on traditional business principles, whichthe company will not compromise on despitebeing less conservative in other areas of thebusiness.

“Our strengths are our services as we en-sure prompt delivery (of our products) to ourcustomers, with our products being of goodquality. We guarantee them (our customers)this and we promise on what we deliver as ifwe fail on either promise, the downtime toour clients, who are in the oil and gas indus-try, can be very costly,” Mr Teo tells The Busi-ness Times.

That formula has worked to produce goodresults for the company. For its first financialquarter ended June 30, Gaylin announced a30.4 per cent increase in revenue to S$25.8million with its net profit surging 15.9 percent to S$2.7 million.

The group, which offers rigging and liftingequipment such as heavy lift slings and relat-ed services such as load testing is, however,not stopping in its tracks and has rolled outnew plans to expand its business. This yearalone, Gaylin is expanding its operations inMalaysia with another facility, in addition toits test bed facility there, which has a testingcapacity of 3,000 tonnes, and a joint venturebusiness.

Mr Teo says that Gaylin may also look atnew products and services and singled outthe designing of offshore deepsea mooringsystems as a possibility.

The group also recently completed the ac-quisition of 51 per cent of the equity interestin Rig Marine Holdings (Rig Marine) in theMiddle East to give it a foothold into new mar-kets.

“Baku (in Azerbaijan) and Kazakhstan arenew areas where we have not stepped into be-fore while Rig Marine has already been estab-lished in these markets for more than 10years now and they have big projects there,”Mr Teo reveals.

He adds that the acquisition also allowsGaylin access to the winch rental market,which Rig Marine operates in.

Although Mr Teo says that while the grouphas no other acquisition targets on its radarat the moment, he will not rule out such amove when exploring new markets. Having al-ready entered the Middle East market, he re-vealed that Gaylin may now look towards Eu-

rope, particularly Norway and Holland, tomake a breakthrough.

It may not be surprising if Mr Teo were topursue acquisitions to get into these marketsas well. Where many local SMEs (small andmedium-sized enterprises) may have chosena more conservative route of gradual organicgrowth, Mr Teo has not shied away frommergers and acquisitions (M&A) to expandthe group.

Gaylin’s overseas expansion has taken offin the last two years, after its listing on theSGX. Since then, the group has invested morethan S$20 million in its M&A spree across theregion including acquiring Lv Yang (Tianjin)Offshore Equipment in 2013. With Tianjin be-ing one of the key shipbuilding hubs in China,

this purchase allows it to enter the world’s big-gest shipbuilding market.

Mr Teo’s bold approach towards growingGaylin can also be felt in his internal manage-ment of the company. In a tight labour marketand where employers lament the lack ofhomegrown talent interested in the industry,Mr Teo believes in putting Gaylin’s executivesthrough the processes – from a junior and pro-moting them through the ranks – than to para-chute in leaders from outside the company.“This will allow them to learn from scratchrather than to get someone who does notknow about the company’s products and cul-ture.”

He explains how he even chooses to sendthe well-educated and qualified new hires

through the ranks as it is both a chance forthem to learn different aspects of the compa-ny and for them to prove themselves for lead-ership positions. Mr Teo’s approach mayseem novel and even risky to some but it isclearly not alien to him. After all, he himselfstarted with the company from humble begin-nings, joining in 1979 as a driver, deliveringits products around town. This experience notonly shaped Mr Teo as a resolute leader, hav-ing steered Gaylin through several sectoraland economic downturns, but also as a hum-ble man.

These humble beginnings have shaped MrTeo’s beliefs in giving back to the communityand shareholders. Shareholders should takenote that Mr Teo firmly believes in Gaylin con-

tinuing with its practice of offering attractivedividend pay-outs, subject to its profitabilityand board approval. Investors, he believes,should be rewarded adequately for their faithand confidence in the company.

The philanthropist has also built up astrong corporate social responsibility (CSR)culture at Gaylin as he himself serves on theboards of several non-profit and grassroots or-ganisations, including Ren Xi Hospital.

Mr Teo was recently among 14 Singapo-rean entrepreneurs honoured at the Asia Pa-cific Entrepreneurship Awards under theMost Promising category. With his bold yetgrounded management style, both Gaylin andMr Teo could yet achieve greater things.msingh@sph.com.sg@MalminderjitBT

BEING on the board of directors of acompany is a privilege. However, itcomes with responsibilities – and lia-bilities. You may, for example, besued by, say, a stakeholder who suf-

fers financial loss and attributes it to a failureof your duty as a director.

Directors and Officers (D&O) Insuranceprovides directors and company officers liabil-ity cover for claims which may arise from thedecisions and actions taken within theirscope of regular duties and responsibilities.

Liability mythsSome directors do not consider D&O Insur-ance to be necessary. Among their misconcep-tions are:

◆ “I will be diligent and prudent in discharg-ing my responsibilities, so there is no risk ofliability.”

No matter how competent, prudent and dil-igent an officer or director is, any business de-cision, especially in today’s complex andchanging environment, can possibly result inlosses for the company, and the directorsand/or officers can potentially be held ac-countable for those losses.

◆ “My company will look after me if I getsued.”

What if the company is the party taking le-gal action against the director? Even if this isnot the case, Section 172 of the CompaniesAct imposes some restrictions on the compa-ny indemnifying the directors for their person-al liability.

◆ “Only publicly listed companies need D&O

Insurance.”Under the Companies Act, the same stand-

ard of care and liabilities exists for directorsof all companies – private, public andnon-profit.

◆ “People sue companies not individuals.”Organisations and their individual direc-

tors and officers can be named as co-defend-ants in the same proceedings.

The bottom line is that D&O Insurance sup-ports good governance by making the risks ofbusiness decisions manageable and transpar-ent.

D&O in SingaporeAccording to the SID’s Board of Directors Sur-vey 2013, 87 per cent of listed companies pro-vide D&O Insurance as a matter of companypolicy. Of those who provide, the combinedcoverage of the insurance for each companyis mostly between S$10 million to S$30 mil-lion (45 per cent) or below S$10 million (42per cent).

Insurance industry practitioners whom Ihave spoken to estimate that the take-up ofD&O Insurance among private companies is alot lower, much less than 50 per cent. Yet, theexposure of liability for private companies ex-ists as it does for the listed companies.

The good news is that the market for D&OInsurance in Singapore has become morecomprehensive due to increased competition.The features of D&O Insurance in Singaporeare now on par with similar products in theUK and US.

For example, many previous exclusions

have been removed. Typically, only the follow-ing are now excluded: overlapping or conflict-ing claims, dishonesty, insolvency, past litiga-tion, fines, bodily injury, property damage,pollution, and employment practice liability.

Personal D&O insuranceThe traditional D&O insurance policy is takenby a company for its board of directors as awhole.

In some circumstances, directors maywant to consider a Personal D&O Insurance

where the policy is taken out in the name ofthe individual director or officer rather thanthe entire board of directors.

Personal D&O Insurance can be particular-ly useful for independent directors who maybe unable to ensure that their company pur-chases relevant or sufficient insurance cover-age. It is also useful to directors who are re-signing or retiring from their positions andwho seek run-off protection.

Since 2011, SID has arranged for a Person-al D&O Insurance policy to be made available

to its members. The individual, portable poli-cy provides for protection against liability forup to S$1 million in three directorships.

While there is no substitute to performingone’s duties properly, D&O Insurance pro-vides comfort and assurance to a director, al-lowing him to make the important decisionsconfidently, knowing that the risks are beingmitigated.

The author is a member of the Advocacy &Research Committee of the Singapore

Institute of Directors

Gaylin Holdings has plans to expand its business but won’t compromise on the strength of its principles, reports MALMINDERJIT SINGH

POH MUI HOON clears the misconceptions that it isnot necessary for directors to be covered

Novel leadership: Mr Teo’s bold approach towards growing Gaylin can also be felt in his internal management of the company; he chooses to send the well-educated and qualified newhires through the ranks as it is both a chance for them to learn different aspects of the company and for them to prove themselves for leadership positions. FILE PHOTO

Cover for potential lawsuits: Directors and Officers Insurance provides comfort and assurance to a director, allowing him to make theimportant decisions confidently, knowing that the risks are being mitigated. PHOTO: STOCKXCHNG

TOPLINE

Boldness grounded in tradition

D&O Insurance –Do you need it?

4 COMPANY NEWS The Business Times, Monday, August 18, 2014 ●