Directors’ Duties in Singapore

>> Board Requirements in Singapore

Appointment of Directors

The appointment of directors should generally be made by the directors of the company unless the constitution of the company or shareholders’ agreement states otherwise.

At least one of the directors has to be ordinarily resident in Singapore. The ordinarily resident director need not necessarily be a Singapore citizen or a Singapore permanent resident. An expatriate working on a valid employment pass may qualify if he/she is ordinarily a resident in Singapore. In general such expatriates can only act as directors of the Singapore company that applies for their employment pass. However, other than the residency requirements, there are no qualification requirements surrounding nationality, education or professional experience. Education  and  professional  experience  are however factors considered in work pass applications for foreign directors.

The following are common examples of individuals restricted from acting as a director:

  • undischarged bankrupts, whether in Singapore or a foreign jurisdiction
  • persons convicted (whether in Singapore or elsewhere) of any offences involving fraud or dishonesty punishable with imprisonment for three months or more and any offence under Part XII of Securities and Futures Act (Cap. 289) or the person is subject to the imposition of a civil penalty under Section 232 of the Securities

& Futures Act

  • persons convicted  in  Singapore  of  any offence in connection with the formation or management of a corporation or any offence under Section 157 or 339, or in breach of their statutory directors’ duties, failure to keep proper accounting records prior to investigation or winding up of the company or where the court has made a further disqualification order
  • persons persistently in default of the relevant requirements of the CA
  • persons disqualified to act as a manager under certain sections of the Limited Liability Partnerships Act (Cap. 163A)
  • persons not of full age and capacity (the minimum age here being 18 years old)

Signatory Rights / Powers of Directors

The directors are vested with the power to manage, direct or supervise the running of the company. The directors may exercise all the powers of a company except any power that the CA or the constitution of the company requires the company to exercise in a general meeting of the shareholders. The directors should only exercise  their  powers  individually  when  a majority of the directors have agreed for such director to do so, or have delegated such right to the said director.

Each director has one vote at a board meeting  and decisions are to be passed by a majority of votes of the directors, unless there is a deadlock, upon which the chairman of that meeting shall have a second or casting vote if stated so in  the constitution.

Conflicts of Interest

Directors cannot place themselves in a position where their personal interests conflict with the interests  of  the  company.  Such  situations typically arise where a director wishes to enter into or has a personal interest in a transaction the company. In such a situation, a director must declare the nature of his/her interest at a board of directors’ meeting or send a written notice to the company stating the nature, character and extent of his/her interest.

In addition, a director who is an officer, partner or member of another entity that is interested in any transactions with the company should make a declaration at a board meeting or provide written notice to the company, stating his role in the other entity and that he/she is to be regarded as interested in any transaction between the company  and  the  other  entity,  and  also specifying the nature and extent of his/her interest in the other entity. Additionally, a director who holds any office or possesses any property  which  might  create,  directly  or indirectly, duties or interests which conflict with his/her duties as a director of the company, should be declared at the next convened board meeting or send a written notice to the company. Such  written  notice  must  state  the  facts, character  and  extent  of  the  conflict.  The secretary is required to record all declarations made in the minutes of the meeting at which it was made and keep records of every such written resolution signed and returned to the company.

Furthermore, subject to certain exceptions, there are prohibitions against companies providing loans, quasi-loans, credit transactions, guarantees or securities to directors (including their family members), or other companies in which a director or the directors (or their family members) hold at least 20% of the total voting power of such companies. Please note, “family members” would include a director’s spouse, children, adopted children and step-children.

Directors may disclose information which he has in his capacity as a director or an employee of a company, being information that would not otherwise be available to him, to a person whose interests the director represents, or a person in accordance with whose directions or instructions the director may be required or is accustomed to act in relation to the director’s powers and duties. Directors should refrain from disclosing the company’s information if such disclosure is likely to prejudice the company, and is made without the authorisation of the board of directors.


Latest version updated 9th April 2018

Country Breakdown

5.607

Million

Population

S$

Singapore Dollar

Currency

$ 297

Billion

GDP

719.1

km2