Our Managing Director Mark Lee spoke at Lexology’s Masterclass Series.
The session covered the complexities of the function of a company’s board and the labyrinth of directors’ duties that an individual has to navigate in this 21st century corporate jungle.
Key Takeaways
1. Your title does not lower the bar.
Singapore law recognises only one kind of director. Executive, non-executive, independent and nominee are labels, not different standards. In BIT Baltic Investment [2023] SGCA 17, the Court of Appeal held that even a nominee local resident director appointed only to meet the statutory requirement must meet a “minimum objective standard of care”. That means taking reasonable steps to put yourself in a position to guide and monitor management. A director cannot be a “sentinel asleep at his post”.
2. Standard of care.
The IPP v Goh Jin Hian litigation (High Court, 2024; Appellate Division, 2025) confirmed two things. The standard of care will not be lowered to allow for a director’s gaps in knowledge. It will be raised where the director has, or holds himself out as having, special knowledge or experience.
3. A sentinel, not a sleuth.
The Appellate Division in IPP v Goh Jin Hian also held that directors are not forensic investigators, but warning signs may put them on inquiry.
4. Honest business judgment is protected, but “best interests” can shift.
The Singapore ourts will not second-guess commercial decisions made in good faith. That said, the Court of Appeal in Foo Kian Beng v OP3 International [2024] SGCA 10 made clear that a company’s best interests “do not admit of a single and unchanging answer”. As a company moves towards insolvency, creditors’ interests become more important, and directors have to know when that point arrives.
5. Wearing two hats.
Many owner-directors are both shareholders and directors. A shareholder may vote in pure self-interest, but a director may not.
6. The criminal / regulatory exposure is real.
In PP v Zheng Jia [2025] SGHC 76, a professional nominee director registered as director of 384 companies but exercised no oversight at all. On appeal, his fine of S$8,500 was replaced with 10 months’ imprisonment, along with disqualification. The message for anyone offering “local director” services is clear.
Mark also covered directors’ personal exposure for their company’s breach of contract, disqualification for undischarged bankrupts, and disclosure and accounting-related offences under the Securities and Futures Act and the Companies Act.
How ML Chambers can help
ML Chambers advises boards, individual directors, shareholders on directors’ duties, board governance, shareholder disputes and director liability claims. To learn more, please contact our directors:-