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:
& Futures Act
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.
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.