What is the Governments role with regard to the investment decisions made by GIC, MAS and Temasek?
The Government plays no role in decisions on individual investments that are made by GIC, MAS and Temasek. At the GIC and MAS, whose boards include Ministers, these investment decisions are entirely the responsibility of their respective management teams.
In the case of Temasek, where the Government has no representation on the Board, investment decisions are fully independent of any Government involvement or influence.
The Governments role is instead as follows:
First, the Government establishes the overall investment mandates and objectives of GIC, MAS and Temasek.
Second, the Government ensures that each of these entities has a competent board to oversee the management and seek to ensure that their respective mandates are met.
Third, the Government systematically reviews the overall risks of its whole portfolio of assets invested by the three entities. This includes monitoring whether there is appropriate diversification in terms of asset classes, sectors and geographies. The Government also assesses the impact of various adverse global scenarios across medium to long-term timeframes on the whole portfolio, to ensure that the downside risks to the whole portfolio are not excessive.
Fourth, based on the overall risk profile of the Governments portfolio, it decides how government capital should be allocated among the three entities. This takes into account the different investment orientations of MAS, GIC and Temasek, which place them at different parts of the spectrum of investment risk.
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