Regulations on the Practice of 'Overboarding' in Singapore14 Feb 2023
Parliamentary Question by Mr Leon Perera:
To ask the Deputy Prime Minister and Minister for Finance (a) whether there are existing regulations on the practice of 'overboarding' in Singapore, where individuals hold more board directorships than they can responsibly handle; and (b) if there are none, whether the Government will study introducing such regulations for Singapore-incorporated or Singapore-listed companies.
Parliamentary Reply by Senior Minister of State fo Finance, Mr Chee Hong Tat:
The Companies Act does not limit the number of directorships that an individual may hold for Singapore-incorporated companies. All directors, regardless of the number of directorships held, are required to discharge their duties responsibly, and with honesty and reasonable diligence. Those who fail to do so can face enforcement action, including disqualification and debarment.
Singapore-listed companies are subject to additional requirements relating to Board appointments, given the public interest involved. Under SGX’s Listing Rules, they are required to disclose the directorships and principal commitments of individuals seeking to be appointed or re-elected to their Boards. In addition, under the Code of Corporate Governance, where a director holds a significant number of directorships, the company’s Nominating Committee and Board are to provide a reasoned assessment of the ability of the director to diligently discharge his or her duties.
On the whole, the practice of individuals holding more board directorships than they can responsibly handle is not prevalent in Singapore. About 95% of directors of Singapore-listed companies hold no more than two directorships, and over 80% of directors hold only one directorship. Ultimately, it is also the responsibility of companies, Boards and shareholders to ensure that their directors are not “overboarded” and can discharge their duties effectively.