SINGAPORE — The eligibility criteria for private-sector presidential candidates would be made more stringent, including increasing the S$100 million paid-up capital threshold to S$500 million in shareholders’ equity, the Constitutional Commission reviewing the Elected Presidency said in its report.

Even with this increased threshold, more companies will qualify — 691 based on records by the Accounting and Corporate Regulatory Authority (Acra) this year, compared to the 158 which met the original threshold in 1993.

The commission noted that in all likelihood, the number would be even higher than 691, because about 80 per cent of Singapore-incorporated companies do not file their financial statements with Acra. 

Those who do not file might have more than or equal to S$500 million in shareholders’ equity.

If it were based on the original threshold of S$100 million in paid-up capital, more than 2,000 companies this year would be able to qualify.

Other proposed changes by the commission include introducing a performance criteria, and stipulating that the candidate must have held the “most senior executive position in the company, however that office may be titled”. 

This description is more appropriate because it would be the person with highest level of executive authority, whether it is the chief executive officer or managing director, who bears the ultimate responsibility for the company rather than someone in a non-executive role who is not actively involved in running it.

In setting out the change to increase the threshold, the commission pointed out that the presidential candidates must have the financial knowledge to understand the intricacies of various proposals and the “confidence that comes with a certain degree of familiarity with making decisions involving very large sums of money”.

This is because the President would have to make large-scale and complex decisions and to shoulder the responsibility that comes with them, in particular when he or she has to scrutinise the drawdowns of the national reserves and the “magnitude of economic forces which may potentially impact the nation”. 

As an example, it mentioned that in 2008, former President S R Nathan approved a S$150 billion guarantee on all bank deposits in Singapore, to be backed by the country’s reserves.

The commission also highlighted the changes in the economic situation since 25 years ago. For instance, Central Provident Fund (CPF) balances have increased more than seven times, from S$41 billion to 
S$300 billion, while nominal Gross Domestic Product has increased more than five times, from S$71 billion to S$402 billion. 

More complex economic and policy judgments are required now, it concluded.

In explaining why it proposed changing the criteria from paid-up capital to shareholders’ equity, the commission said that paid-up capital may not provide an accurate measure of a company’s current size, or the value and complexity of its operations. 

In particular, it might not reflect the depletion or accumulation of the company’s assets and earnings over time.

Using shareholders’ equity, on the other hand, reflects the company’s current recorded worth.

The commission’s report also included changes made for candidates from the public sector, such as the appointments of Accountant-General and Auditor-General being dropped from the list of qualifying offices. 

It said that the scope of these two offices and the extent of the office-holders’ responsibilities do not justify automatic qualification.

TIMELINE OF SINGAPORE'S PRESIDENTIAL SYSTEM