Singapore has based its corporate governance system on the Anglo-American pattern. Corporate governance in Singapore is based on capital market control and managerial behavior. The main regulatory framework companies rely on when conducting business operation, naming managers, shareholders and their rights is the Singapore Companies Act adopted in 1990. According to the Companies Law, all shareholders rights must be specified in the Memorandum or Articles of Association of a company. The Articles of Association must be drafted according to the Fourth Schedule in the Companies Act.
As stated in the Corporate Governance Code, Singapore companies should have a board that will control the company. The board must co-operate with the management of the company and together achieve all goals that will lead to the enterprise’s success. The board must establish the company’s aims, it must lead the company and assure the company has all necessary resources to meet those expectations. The board must also draw the code of conduct and assess the management’s performance. The board must also make sure the shareholders and third parties’ rights are respected. According to the Articles of Association of a company, the board should hold regular meetings.
The management of a Singapore company must also have a chairman and a chief executive officer (CEO). They will be in charge with the executive responsibility in the company’s activities. According to the Corporate Governance Code in Singapore, the chairman and CEO functions cannot be occupied by the same individual. The responsibilities of the chairman and CEO of a company must be clearly delimited and approved by the board. The chairman must act as a leader of the board and make sure all important information reaches the directors in an accurate and timely manner.
The management board of Singapore companies should be appointed by the board. According to the Corporate Governance Code each company should have a nominating committee that would make pertinent recommendations to the board. The committee should have at least three independent members. The committee should also have clear guidelines that will describe their responsibilities.
Our company formation staff in Singapore will provide useful information about corporate governance and will help clients in drafting the Articles of Association of companies. You can contact us if you require help with the set up process of your business in Singapore.