The board of directors plays a pivotal role in the governance and management of a company. Their responsibilities are extensive, encompassing a wide range of duties that ensure the company’s success, protect stakeholders’ interests, and maintain compliance with relevant laws and regulations. Here’s a breakdown of the primary functions of the board of directors in Singapore:

1. Management and Direction of the Company’s Business

The Companies Act explicitly states that the company’s business is managed by or under the direction or supervision of the directors. Directors possess the authority to exercise all powers of a company, except those that the Act or the Constitution requires the company to exercise in a general meeting. Unless the company’s articles state otherwise, the directors exercise their powers collectively as a board, typically through board meetings or written resolutions. The board holds the responsibility for policy matters.

2. Setting Strategy and Objectives

Directors are responsible for the company’s stewardship, which includes defining and implementing corporate strategy. The board collectively discusses and sets the company’s strategic aims, providing entrepreneurial leadership within a framework of prudent and effective controls. They ensure that the necessary financial and human resources are available to achieve these objectives.

3. Oversight and Monitoring

The board is responsible for overseeing management’s performance and conduct. This includes monitoring the performance and proper conduct of the company’s business, overseeing internal controls, risk management, financial reporting, and compliance. Non-executive directors, particularly independent ones, play a key role in overseeing the board’s activities and monitoring management’s actions. The board is also responsible for ensuring the accuracy of financial information and the robustness of financial controls and risk management systems. 

 

4. Ensuring Proper Governance and Compliance

Directors are the primary guardians of corporate governance. They are responsible for ensuring compliance with all legislative and regulatory requirements, setting the company’s values and standards, and ensuring that the company meets its obligations to shareholders and other stakeholders. Directors must also properly discharge their fiduciary duties. 

5. Financial Accountability and Reporting

Directors are responsible for ensuring that proper accounting and other records are kept. They are also responsible for distributing financial statements and other documents as required by the Companies Act. Directors determine the conditions under which accounting records are open to member inspection and present a true and fair view of the company’s financial position through the profit and loss account and balance sheet at the annual general meeting, along with a statutory directors’ report. All directors must take reasonable steps to ensure the company complies with the Act’s provisions regarding accounts. 

6. Appointments and Remuneration

The board is responsible for appointing directors to committees and senior management. Non-executive directors determine appropriate remuneration levels for executive directors. 

7. Protecting Shareholders’ Interests

Protecting the shareholders’ interests is one of the board’s main responsibilities. 

8. Delegation of Authority

While directors manage the company’s business, they may delegate certain functions to management employees. However, this delegation does not absolve a director from the duty to supervise the discharge of these delegated functions. 

 

In summary, the board of directors plays a central role in guiding, directing, and overseeing the company, ensuring its success, protecting stakeholder interests, and complying with laws and regulations.

Navigating the complexities of corporate governance and compliance can be challenging. For tailored advice and assistance, the experienced team at Raffles Corporate Services Pte Ltd is here to help.

For further assistance or inquiries, you can contact the Raffles Corporate Services team via email at [email protected].

Yours sincerely,

The editorial team at Raffles Corporate Services