《Duties and Responsibilities of Directors of a Singapore Company》.pdf

■ CORPORATE SERVICES ■ IMMIGRATION Directors’ Duties and Responsibilities A. COMMON LAW DUTIES Directors are mainly responsible for the overall management of the company. In exercising their powers, they must act honestly with diligence and with reasonable skill. 1. Act in the Best Interests of the Company (a) A director must act in what he honestly considers to be the company’s interests, and not in the interests of some other person or body. In discharging the duties of his position, a director must: (i) act honestly and with the utmost good faith for the benefit of the company (he should not take into account either his personal interests (other than as shareholder of the company) or ties to family, friends or other outside interests); and (ii) use reasonable diligence in his attention to the business of the company and to exercise discretion and care. The aforesaid constitutes the director’s main and overriding duty. This means that everything that a director does in his capacity of a director must be done to promote or advance the interests of his company. The director has the duty to ensure that whatever transactions that are authorized by the board or the individual directors must be commercially justifiable from the company’s point of view. “Commercially justifiable” does not mean that profits must be maximized. Directors are allowed to take a wider view of what the company’s interests are. A transaction that seems on the face of it to be a bad one may be commercially justifia