Directors charged or sued - what can we learn from recent cases?
This was the theme of the recent Current Topic organised by Singapore Institute of Directors attended by some 120 directors, company secretaries, and regulators.
The session started with a context setting by Adrian Chan, SID Vice Chair and Head of Corporate at Lee & Lee, where he dissected a recent high profile case to draw lessons (and questions) for directors.
The panel moderated by SID Council member and Managing Partner at WongPartnership LLP Wai King Ng then presented three scenarios based on real cases, with each panelist taking turns to role-play various positions to illuminate the key issues to bring the learning to life.
Due to sensitivity, the names and industry of the companies and individuals involved in each scenario where changed, but as the scenarios were all based on real life cases, the lessons drawn from the discussions were universal.
Chatham house rules was enforced and no media was present to allow the panelists to be candid.
There were many reflection points and key takeaways, but for me, the top three are:
📌 As a director, you have fiduciary duty. You are responsibility to supervise and monitor all aspects of the business, so you really need to always apply your mind.
📌 As a director, you can’t just rely on others to bring matters to light. You have a duty to ask questions, such as the impact of regulatory, licensing, compliance issues on profitability, financial conditions, and business viability. You’ve got to have the questions minuted down too.
📌 Section 157C of the Companies Act 1967 spells out that directors may rely on reports, statements, financial data, etc prepared or supplied by competent employees, professional advisers or experts. However, the caveat is that the director acts in good faith and makes proper inquiry.
So it all boils down to:
👉 Act honestly and dutifully
👉Apply your mind
👉Ask questions
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Big thanks to the esteemed panelists for bringing the lessons to life: Adrian Chan Wai King Ng Su-Yen Wong 黄素燕 Grace Ho Irving Low Gim Teik Soh Ong Jia Ni
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Public Service, CE at ACRA
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