Directors set the vision and long-term goals of the organisation. This includes the strategy to achieve that vision, as well as the monitoring of the strategy implementation. Directors play an important role in ensuring the organisation complies with all necessary legislation and remains financially solvent. Show
Directors vs senior managementDirectors are concerned with the big-picture and use a ‘helicopter focus’, which involves steering the organisation towards its goals and ensuring the day-to-day management of the organisation is consistently aligned with the overall organisation’s vision. It is important to note that directors DO NOT replace the management team. In fact, there is a very important distinction to be made between them. Directors supervise and complement the role of the management team by offering long-term planning, financial oversight, and inside knowledge. In contrast, the management team is concerned with the operational running of the business. Although management and directors have very different roles, effective organisations ensure that there is a strong relationship between board and management. RoleThe role of the director is to:
The value of directors comes to bear at meetings. A good board will try to debate an issue from every angle before coming to a decision. A director should be prepared, informed, and ready to debate and think about the strategic future. Some directors will have general skills, while others more specific, either way, they will add value to the company with a fresh perspective. Directors also:
NB: Companies and not-for-profits are required by law to have at least one director. If you are an SME-owner/operator thinking about setting up a board for your company, you will find other useful information in Starting a board. The art of governanceOne of two vice-presidents of the New Zealand Academy of Fine Arts, Ellen Hodgetts is an artistic director of a different ilk. Among all stakeholders in a company, the director is the most important one as he or she is the person responsible for managing the affairs of the company and providing it with directions. ACRA states: “A director must make decisions objectively, act in the best interest of the company, avoid conflicts of interest, and be honest and diligent in carrying out his duties.” Related Reading: Appointing the Right Company Secretary and Resident Director is Most Important Frequently Asked Questions on Company Director and Company Secretary Definition of a Resident Director in a Singapore Company Thus, it is important to note that under this definition, even though a person is not formally appointed as a director, ACRA will still “recognise that person as a director if other directors of the company follow his instructions or if he is involved in the management of the company”. Though, normally, a person is said to have agreed to become a company director once he has signed the prescribed consent form to act as one. Number of Directors Required by a Company in SingaporeWhile the minimum number of directors required for Singapore company registration is one, the maximum number will usually be stated in the company’s constitution. It’s important to note that if a company has only one director, that sole director may also be the sole shareholder of the company. But do note that the same person cannot also serve as the company secretary. Thus, even a one-director company will still have at least two company officers – a director and a company secretary. At least one resident directorACRA says that being “ordinarily resident” means the director’s usual place of residence is in Singapore. “A Singapore Citizen, Singapore Permanent Resident, an EntrePass holder or an Employment Pass holder issued with such a pass to work in the company concerned and who has a local residential address can be accepted as a person who is ordinarily resident here,” notes the Authority. Role of a Nominee Director in a Singapore Company A nominee director is a person appointed to represent the interests of another group or person. For instance, a nominee director may be appointed to sit in a board by a substantial shareholder or a special class of shareholders. In Singapore, a nominee director has the same obligations and responsibilities as those imposed on a regular director by the Companies Act and the common law. We can help you fulfil this requirement by appointing one of our team members to act as the nominee resident director for your Singapore company, on a short-term or annual basis. Who Can be a Company Director in SingaporeWhile there is no maximum age limit to be the director of a private company, for a public or a subsidiary of a public company, unless reappointed at the company’s annual general meeting. Who Cannot be a Company Director in SingaporeACRA also defines the circumstances which disqualify a person from being a company director:
It is the duty of the director to inform the company concerned, which must in turn inform ACRA, about his or her disqualification status. Notably, a director who is subject to an automatic disqualification or a disqualification order under sections 34, 35, or 36 of the Limited Liability Partnerships Act (Chapter 163A), will also be disqualified under the Companies Act to act as a director or be involved in a company’s management. Common Statutory Requirements to be Ensured by the Company Director
If the above two are not met, either a penalty is imposed on the company or legal action is taken against the company directors. Normally, during an AGM, dividends are declared, directors are elected, auditors are fixed and their remuneration is determined, the company’s accounts and balance sheets are considered, and any other “special business” as required is conducted. While a private limited company in Singapore can chose not to hold AGMs if all members have agreed to it by way of a resolution, the company must still file its annual returns. Colour-Coded Compliance Rating and Certificate of Compliance in SingaporeACRA in April 2010 launched the Colour-Coded Compliance Rating for locally incorporated companies. This is to recognise and appreciate the companies which comply with the three most important mandatory statutory requirements under the Companies Act: the timely holding of AGM (section 175), laying of up-to-date financial statements at the AGM (section 201), and the timely filing of the AR (section 197).
Registering a Local Company Address in SingaporeHowever, most companies make use of the office address of their corporate service provider or a professional firm for a fee as their registered office address. “There is no problem with such arrangement as long as there is a physical location where your company can be contacted by post and other means,” notes ACRA. Records of Statutory Registers by a Company in SingaporeA company director must also ensure that the company maintains the following registers at the company’s registered office:
Any changes in the content of the above registers must be notified to ACRA immediately. Do note that ACRA takes late filings or notifications lodged outside the statutory timeline very seriously and company directors are generally held responsible for such delays. Directors’ Resolutions of a Singapore Company
It is the duty of the Company Secretary to keep records of Directors’ Resolutions of a company. In fact even though the role, duties and responsibilities of a Company Secretary is not defined in the Companies Act, it is an important appointment as he is the officer primarily responsible for administrative and reporting functions that are governed by the law. The Company Secretary also assists the company directors in ensuring that the company meets all its regulatory obligations. Other duties of a Singapore Company Director
Penalties on a Singapore Company Director for Breach of DutiesWhile the directors’ statutory duties are enforced by ACRA, the company imposes common law duties on its directors. Statutory law dutiesCommon law dutiesMentioned in statutesMentioned in casesACRA imposes theseCompany enforces theseCriminal and civil liabilitiesCivil liabilities onlyThe company can’t stop ACRA from prosecuting a company director for breachesThe company as well as the courts can excuse breachesTake up our Nominee Resident Director servicesEngage our Nominee Resident Director service for your Singapore company today to fulfill your statutory compliance requirements. |
