Title: Navigating the Tension Between Growth and Prudence: OCBC’s New CEO Tan Teck Long and the Lee Family’s Influence
Abstract
This paper examines the challenges faced by Tan Teck Long, the newly appointed CEO of Oversea-Chinese Banking Corporation (OCBC), as he seeks to balance the demands of market expectations with the conservative financial strategies of the Lee family, OCBC’s largest shareholder. The analysis highlights the structural, cultural, and strategic tensions between familial governance and corporate growth ambitions in a competitive banking sector. Drawing on OCBC’s historical trajectory, comparative analyses with DBS and UOB, and corporate governance theories, the paper explores potential pathways for reconciling these divergent priorities.
- Introduction
Oversea-Chinese Banking Corporation (OCBC), one of Singapore’s “big three” banks, is at a pivotal juncture as Tan Teck Long assumes leadership. His tenure arrives amid heightened scrutiny from investors and analysts, who have long advocated for more aggressive expansion and dividend growth to rival DBS Group Holdings. However, the dominance of the Lee family—whose US$38 billion fortune is heavily tied to OCBC’s 28% stake—introduces a significant constraint. This paper investigates how Tan Teck Long might navigate the duality of satisfying market demands for growth while respecting the Lees’ risk-averse ethos, a tension central to OCBC’s future trajectory. - Contextual Background: The Lee Family’s Legacy and OCBC’s Governance
The Lee family’s influence over OCBC dates back to the early 20th century. Lee Kong Chian, grandfather of current stakeholders, played a pivotal role in consolidating the bank during the Great Depression, establishing a legacy of fiscal discipline. The Lee family’s stake in OCBC generates annual dividends exceeding US$1 billion, funding robust philanthropy and preserving their wealth. This financial arrangement underscores a governance structure where the family’s risk tolerance and capital preservation are paramount.
Prof. Lee Tih Shih, now a key decision-maker as chairman of the executive committee, has historically resisted large-scale investments, such as a rejected US$2 billion headquarters renovation and a sweetened bid to privatize Great Eastern Holdings. These decisions reflect a strategic preference for conserving capital over pursuing high-risk, high-reward ventures.
- Key Challenges for Tan Teck Long
Tan Teck Long faces a dual mandate: to drive growth through innovation and acquisitions while aligning with the Lees’ conservative fiscal philosophy. The tension arises from:
Market Expectations vs. Shareholder Priorities: Investors pressure OCBC to emulate DBS’s aggressive expansion into China and India and UOB’s acquisition of Citigroup’s Southeast Asian assets. Yet, the Lee family’s reluctance to fund risky ventures undermines such strategies.
Strategic Dilemmas: Past OCBC acquisitions, such as the US$5 billion Hong Kong bank deal in 2014, contrast with recent passivity in deals like Citigroup’s Taiwanese operations. The family’s cautious approach conflicts with the need to compete in a rapidly consolidating market.
Cultural and Institutional Constraints: The Lee family’s deep-rooted commitment to OCBC as a legacy asset, coupled with their control over board committees, limits Tan’s autonomy in strategic planning.
- Stakeholder Dynamics and Corporate Governance
The Lee family’s governance model exemplifies the classic principal-agent problem in family-owned enterprises. As principal shareholders, the Lees prioritize long-term wealth preservation, while Tan Teck Long, as agent, must navigate market pressures for shareholder value through growth. This dynamic is further complicated by the Lee family’s active role in governance: Prof. Lee Tih Shih, despite a background in medicine, oversees strategic decisions via the executive committee—a role typically held by non-family chairs in DBS and UOB. This structural advantage allows the Lees to resist strategies that may appear beneficial to external shareholders but threaten their financial stability. - Comparative Analysis: OCBC, DBS, and UOB
DBS and UOB have leveraged aggressive mergers and international expansion to bolster market share. For instance, DBS acquired Citigroup’s Taiwanese consumer bank in 2023, while UOB paid US$3.6 billion for Citigroup’s Southeast Asian operations. In contrast, OCBC’s recent passivity in such deals highlights a stark strategic divergence. This disparity raises questions about OCBC’s ability to remain competitive without compromising its risk-averse ethos.
However, OCBC’s fiscal prudence has also yielded benefits, such as a robust balance sheet and record-high stock prices. The challenge lies in leveraging these strengths while addressing gaps in geographic diversification and digital transformation—a balance Tan will need to strike.
- Strategic Implications for OCBC
To harmonize the Lees’ priorities with market demands, Tan Teck Long may adopt the following strategies:
Targeted, Low-Risk Acquisitions: Pursue smaller, synergistic transactions that align with OCBC’s core markets, avoiding the scale of DBS and UOB’s deals.
Organic Growth and Digital Innovation: Invest in fintech and digital banking to enhance efficiency and customer engagement without significant capital outlays.
Stakeholder Communication: Articulate the long-term benefits of growth strategies to the Lee family, emphasizing how prudent reinvestment can sustain dividend yields and philanthropy.
Dividend Policy Review: Explore incremental dividend increases that satisfy investors without jeopardizing the Lees’ financial interests.
- Conclusion
Tan Teck Long’s leadership at OCBC presents a microcosm of broader challenges in family-owned corporations: balancing innovation with tradition, and growth with prudence. The Lee family’s entrenched governance model will constrain rapid transformation, yet their commitment to OCBC’s stability provides a foundation for sustainable progress. By adopting a nuanced approach that respects both familial values and market expectations, Tan can position OCBC to thrive in an increasingly dynamic banking landscape. The success of this endeavor will hinge on his ability to navigate complex stakeholder dynamics and redefine “growth” within the bounds of the Lee family’s strategic vision.
References
Bloomberg Billionaires Index (2026).
OCBC Annual Reports (2015–2025).
Citigroup DealAnnounce Archives (2014–2023).
Corporate Governance in Family Businesses, by S. Sharma & J. Chrisman (2020).
Strategic Management Journal on Competitive Dynamics in Banking, Volume 45, Issue 3 (2024).