Source of article: THE STRAITS TIMES

In summary:

While it is an honour to be nominated and elected to a company’s board of directors, the position comes with serious duties and responsibilities.

Most prudent businessmen will not hesitate in refusing to guarantee a friend’s loan. A number may however readily fall for the dubious prestige of being invited on to the board of a company, sometimes with results that could be fatal if they have not acted with due care as directors of a company.

The roles and functions of directors have always been difficult to define. The law as a whole takes a pragmatic approach in not attempting to formulate an exhaustive list of matters that directors have to undertake to discharge their fiduciary and statutory responsibilities.

As a starting point, Section 157(1) of the Singapore Companies Act states that a director must at all times act honestly and use reasonable diligence in the discharge of the duties of his or her office.

How do directors demonstrate that they have acted with reasonable diligence in the discharge of their duties as directors? The importance of acting with integrity and honesty is cardinal to every director – that does not need any special training or certified qualification.

I shared my views with Mr Colin Tan, Senior Correspondent, the Singapore Straits Times, in the attached commenary published on 18 January 2024.

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