In Singapore, company directors and officers have specific duties and responsibilities outlined in the Companies Act and other relevant laws. These responsibilities are designed to ensure proper corporate governance, compliance with the law, and the protection of shareholders’ interests. Here are the key duties and responsibilities of company directors and officers in Singapore:
1. Fiduciary Duties:
- Duty of Loyalty: Directors must act in the best interests of the company and its shareholders. They should avoid conflicts of interest and disclose any personal interests in transactions involving the company.
- Duty of Care: Directors must exercise reasonable care, skill, and diligence in performing their duties. This includes making informed decisions, staying informed about the company’s affairs, and attending board meetings.
- Duty of Skill: Directors are expected to possess the skills and knowledge necessary for their roles. If a director lacks specific expertise, they should seek professional advice when needed.
2. Duty to Act Within Powers:
- Directors must act in accordance with the company’s constitution (memorandum and articles of association) and the law. They should not exceed the powers granted to them by the company’s constitution or resolutions passed by shareholders.
3. Duty to Promote the Success of the Company:
- Directors must act in a way that promotes the long-term success of the company. They should consider the interests of employees, maintain business relationships, and contribute to the community and environment.
4. Duty to Exercise Independent Judgment:
- Directors should exercise their independent judgment when making decisions on behalf of the company. They should not be unduly influenced by other parties, such as shareholders or external interests.
5. Duty to Avoid Conflict of Interest:
- Directors must avoid situations where their personal interests conflict with those of the company. If a conflict arises, directors should declare it and abstain from participating in relevant discussions and decisions.
6. Duty to Declare Interests:
- Directors are required to declare any direct or indirect interest they have in transactions or proposed transactions with the company. This includes shareholdings, directorships in other companies, and personal relationships.
7. Duty to Keep Proper Records:
- Directors should ensure that the company maintains proper accounting records and financial statements in compliance with accounting standards and statutory requirements.
8. Duty to Hold Meetings:
- Directors must convene and attend board meetings and general meetings of shareholders as required by the company’s constitution and the law.
9. Duty to Ensure Compliance:
- Directors are responsible for ensuring the company complies with all applicable laws and regulations, including tax laws and industry-specific regulations.
10. Statutory Obligations:
- Directors must fulfill various statutory obligations, such as filing annual returns, financial statements, and other documents with the Accounting and Corporate Regulatory Authority (ACRA).
Failure to fulfill these duties and responsibilities can result in legal liabilities, including fines, disqualification as a director, or personal liability for certain company debts. Therefore, it is crucial for directors and officers to understand their obligations and act diligently in the best interests of the company and its stakeholders. Directors may seek legal counsel or consult with corporate governance experts to ensure compliance with Singapore’s corporate laws and regulations.