Duty to act in good faith and in the best interests of the company
Good corporate governance is essential for the long-term and sustainable growth of a company. High standards of governance entail that companies put in place robust and appropriate structures, processes and people that consider the diverse interests of shareholders, customers, suppliers, regulators and other stakeholders. This is particularly important during the turbulent times of Covid-19, where directors and the executive management team work together to respond quickly to rapidly changing environments.
The board is collectively responsible for the company’s corporate governance and works with management for the long-term success of the company. Directors are fiduciaries under law with an obligation to discharge their duties honestly and in good faith, as well as to act in the best interest of the company and its shareholders. This is spelt out under the Companies Act 1967. Directors of SGX-listed companies should also note the interaction of their statutory duties with their obligations under the Listing Rules. This column aims to elaborate on the latter as a reminder to directors.
