Forum: Balancing director accountability with sound corporate governance

We thank Goh Hock Leng for his views on the challenges faced by local resident directors whose foreign owners have become uncontactable (Fix loopholes in corporate regulatory framework to protect local staff, June 30).

Any company incorporated in Singapore is required to have at least one ordinarily resident director to ensure there is at least one person in Singapore responsible for the company’s compliance with its legal obligations. These include the filing of annual returns and tax returns, and the reporting of suspicious transactions.

Nominee directorship arrangements are a legitimate service provided by many corporate service providers (CSPs) to support their overseas-based clients in fulfilling Singapore’s requirement for an ordinarily resident director when these clients set up a company in Singapore.

CSPs are required under the law to be satisfied that any individual arranged to act as a nominee director is fit to be a director and can properly carry out their duties. In view of the obligations, individuals should familiarise themselves with the duties of a director and conduct proper due diligence before accepting director appointments.

At the same time, CSPs should take reasonable steps to replace an employee or former employee as a nominee director upon request. The Accounting and Corporate Regulatory Authority (ACRA) will take action against CSPs that engage in unethical practices.

Should a sole local resident director face difficulties fulfilling their duties due to uncontactable foreign owners and the company is not carrying on business, they can request ACRA to initiate the process to strike off the company

ACRA remains committed to a regulatory regime that balances strong corporate governance with the ease of doing business. 

Alvin Chen
Director, Compliance Policy and Analytics Department
Accounting and Corporate Regulatory Authority