Singapore: Duties And Responsibilities Of Independent Directors - An Overview

Last Updated: 22 October 2016
Article by Wan Hong Chan


This article seeks to provide a general overview of the role of independent directors in a company listed on the Singapore Exchange Limited (SGX), with a focus on the duties and responsibilities of such independent directors. As issues of corporate governance have come to the fore in recent times in the Singapore media and business community, the role of independent directors in listed companies is becoming increasingly critical in ensuring that companies stay above and beyond any mismanagement.

In this article, we have extracted certain highlights and key provisions from the relevant laws, regulations and guidelines that set the framework for independent directors' duties and responsibilities in Singapore.

Roles and responsibilities of independent directors

Definition of an independent director

While certain provisions in the SGX Listing Manual make reference to "independent directors" of a company, it does not provide a formal definition of an "independent director". However, it refers to non-executive directors who are independent and free from any material business or financial connection with the issuer.

The Code of Corporate Governance 2012 defines an "independent" director to be:

  1. one who has no relationship with the company, its related corporations, its 10% shareholders or its officers;
  2. that could interfere (or be reasonably perceived to interfere);
  3. with the exercise of the director's independent business judgement; and
  4. with a view to the best interests of the company.

Code of Corporate Governance 2012 (the Code)

The Code, part of SGX's 'comply or explain' regime for SGX-listed companies, sets out the principle that there should be a strong and independent element on the board, which is able to exercise objective judgement on corporate affairs independently, in particular, from management and 10% shareholders, and that no individual or small group of individuals should be allowed to dominate the board's decision making.

In this regard, it sets out several guidelines as follows:

  • Guideline 2.1 – Independent directors should make up at least one third of the board.
  • Guideline 2.2 – Independent directors should make up at least half of the board where:
    1. the chairman and chief executive officer (CEO) (or equivalent) is the same person;
    2. the chairman and CEO are immediate family members;
    3. the chairman is part of the management team; or
    4. the chairman is not an independent director.
  • Guideline 2.4 – The independence of a director who has served on the board beyond nine (9) years from date of first appointment should be subject to particularly rigorous review, and accordingly, the board should explain why any such director should be considered independent.
  • Guideline 2.7 – Non-executive directors should:
    1. constructively challenge and help develop proposals on strategy; and
    2. review performance of management in meeting agreed goals and objectives and monitor reporting of performance.
  • Guideline 2.8 – To facilitate a more effective check on management, non-executive directors are encouraged to meet regularly without presence of management.

SGX Listing Manual (Mainboard Rules)

The SGX Listing Manual prescribes certain rules in relation to the requirements for directors, which extends to independent directors, and also the need for an independent element on the board of directors of a company listed on the SGX (an issuer).

  • Rule 210(5)(a) – The directors and executive officers should have appropriate experience and expertise to manage the group's business.
  • Rule 210(5)(b) – The character and integrity of the directors, management and controlling shareholders of the issuer will be a relevant factor for consideration.
  • Rule 210(5)(c) – The issuer's board must have at least two (2) non-executive directors who are independent and free from any material business or financial connection with the issuer.
  • Rule 210(9)(e) – A mineral, oil and gas company must have at least one (1) independent director with appropriate industry experience and expertise.
  • Rule 221 – A foreign issuer must have at least two (2) independent directors, resident in Singapore.
  • Rule 610(8) – Statement by issuer whether any of the independent directors sits on the board of principal subsidiaries based in jurisdictions other than Singapore.
  • Rule 720(1) – An issuer must comply with Rule 210(5) and Rule 221 (if applicable) on a continuing basis.
  • Rule 725 – An issuer must appoint two (2) authorised representatives who must be either directors or a director and the company secretary.
  • Rule 726 – Authorised representatives are:
    1. the principal channel of communication between SGX and issuer at all times; and
    2. to ensure that whenever he or she is outside Singapore, suitable alternates are appointed, available and known to SGX.

With effect from 7 October 2015, directors of SGX-listed companies have also been required to provide undertakings to SGX to the effect that they shall use their best endeavours to comply with the requirements of the SGX pursuant to or in connection with the SGX Listing Manual from time to time in force and use their best endeavours to procure that the SGX-listed company shall so comply.

Companies Act (Chapter 50) of Singapore (the Act)

The Act sets out general duties and obligations of directors, which extend also to independent directors of SGX-listed companies.

Under Section 157(1) of the Act, a director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office. In Agrosin Pte Ltd v Martynov Igor [2009] SGHC 148, it was held that this duty to act honestly entails acting bona fide in the best interests of the company. Further, in Rajabali Jumabhoy v Ameerali Jumabhoy [1997] 3 SLR 802, acting bona fide for the benefit of the company was found to require at least a consideration of views and/or of the relevant material.

Under Section 157(2) of the Act, there is a further duty for an officer or agent of a company not to make improper use of his position as an officer or agent of the company or any information acquired by virtue of his position as an officer or agent of the company to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the company.

Singapore Institute of Directors Statement of Good Practice SGP No. 7/2007 (the SID Statement)

The SID Statement provides further guidance on the role of independent directors, stating that the general role of an independent director, who is by definition also a non-executive director, is no less than other directors, and that to suggest otherwise would be inaccurate. In this regard, non-executive directors should not be engaged in and should not be expected to be engaged in the day-to-day management of the company and are expected to be vigilant guardians of the activities of the board as a whole. They are required to monitor the actions of management, and to do this, they must be independent of management. These safeguards are meant to minimise the danger of management abusing their power.

Pursuant to the SID Statement, the primary task of independent directors is to adopt an oversight role and to ensure that the corporate assets are used only for the company.

This entails, without limitation:

  1. being familiar with the fundamentals of the company's business;
  2. continuing to be informed about the company's activities;
  3. reviewing the accounts;
  4. calling for additional information where the accounts show less than the full picture;
  5. acting as a check on proposed corporate strategy, bearing in mind the economics of any potential transaction;
  6. attending board meetings regularly; and
  7. participating in the appointment, assessment and remuneration of directors.

Independent directors must ask for information about the company's operations and finances and if they do not get it, they must take steps to pursue the matter. Where an error or negligence is discovered, whether on the part of the board or otherwise, the independent director cannot hide behind a cloak of ignorance. The independent director's primary role is to act as a check and balance on the acts of the board and management. There is currently no legislative or regulatory rule providing a difference in degree of duties owed by executive and non-executive or independent directors. However, the Singapore High Court in the Vita Health Laboratories Pte Ltd v Pang Seng Meng [2004] 4 SLR 162 decision made it clear that all directors owe the same degree of duties and responsibilities, regardless of whether he has an executive or non-executive designation. Although the independent director has a less involved role to play than an executive director, he must nevertheless keep himself informed of what is happening within the company. This is so that he can assure himself that the company's best interests are protected and this is the minimum he must perform.


Independent directors are expected to be vigilant gatekeepers, acting as a check and balance on the company's management, with a view to safeguarding the assets of the company and protecting the interests of all shareholders as a whole, and discharging their duties with reasonable diligence. They are also reasonably expected to rise up to the occasion and discharge their duties effectively to resolve the serious problems faced by the company.

Dentons Rodyk acknowledges and thanks Associate Kevin Chua for his contribution in the writing of this article.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
6 Dec 2017, Webinar, New York, United States

Join Dentons for a complimentary webinar focused on the ongoing challenge of integrating new technologies into existing information governance policies and risk management frameworks.

7 Dec 2017, Seminar, Cape Town, South Africa

Dentons South Africa would be delighted if you could join us for our upcoming event.

8 Dec 2017, Seminar, Johannesburg, South Africa

Dentons South Africa would be delighted if you could join us for our upcoming event.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.