Companies’ directors in Singapore have the decisive role to day-to-day manage the company’s business and define its strategy through the Power of Director. They have extensive powers to act on behalf, to bind the company or grant a power of representation to another person, but must always make decisions in the best interest of the company and its shareholders.
- General Director’s decision making
- Directors’ resolutions
- Board meeting resolutions
- Director resolutions in writing
General Director’s decision making
Directors may have the authority to make all decisions on behalf of the company except for the matters that the Company Act or the Constitution of the company expressly reserved to the shareholders of the company.
The directors may take all the day-to-day decisions required to conduct the business such as:
- Hire employee, give power to act on behalf of the company for a specific mission,
- entering the company into binding contracts with third parties,
- authorize payments,
- others general decisions for the running of the company;
There is no specific formalism required, in his daily management decisions, the director’s decisions can be given by e-mail, telephone, etc.
Directors’ resolutions
Major decisions or intentions of the board members shall be taken by resolutions, usually taken by written resolution or during a director board meeting. The Power of Director in Singapore enable to make resolutions for the company
Director’s resolutions are taken whenever the directors need to make a significant or formal decision on behalf of the company. In opposition the routine decision made during the managing of the day-to-day business activity are taken pursuant to the decision power of the director.
Additionally, resolutions provide a record of the directors’ action on behalf of the company. Note that the company constitutions may specify matters that may require a resolution of the board.
Board meeting resolutions
Board meeting resolutions are resolutions taken during a directors meeting. At the request of any of the directors of the company, the company secretary may provide prior notice of at least 7 days to the other directors in order to set a meeting of the board at a specific time. This board meeting may be conducted physically or non-physically.
Usually, resolution in board meeting is adopted at a simple majority (50% of vote). However, the Constitution of the company may organise the processing of the meeting by adding additional rules (notice, quorum, voting mechanism, the appointment of a chairman, …). In case of equal vote, a chairman can be designated among the directors for the meeting to give a casting vote.
Director resolutions in writing
Written resolution are the decisions that the board of director makes in writing rather than at a board meeting.
There is no difference in term of authority with the board resolution made at the meeting, however, it provides more flexibility, especially when the board cannot meet in one place or at a mutual time. They are faster in proceeding and the proposed resolution is circulated to each director for approval.
The directors are required to pass a resolution for – but not limited to – the following matters:
- Appointment of officers of the company (Company Secretary, Nominee Director, Director,etc)
- Opening of a bank account of a company;
- Lending or borrowing money;
- For variation of the capital of the company;
- To appoint an auditor;
- To hold the Annual General Meetings (AGM);
- To transfer some company asset;
- Approval of company restructuration.
In general, directors have the authority to make all decisions on behalf of the company except matter that the Company Act or the constitution of the company requires the company to exercise in general meeting with the shareholder approval.
Some company decisions are beyond the scope of the directors, and can only be made by a resolution of the shareholders.
Taking resolution and Power of Director in Singapore is crucial to keep the company in compliance with the Companies Act 1967. But also, for the functioning of the business, allowing to keep in the record the important past decisions, for shareholder’s monitoring, company’s performance review and for statutory audit purpose.
The assistance of a company secretary is essential in the preparation of the company resolutions.
