In corporate governance, a nominee director is a person who is nominated to the board of directors by the shareholders of a company, rather than being elected by the other directors. The role of a nominee director is to represent the interests of the shareholders who have nominated them, and they are usually chosen because they have expertise or experience in a particular area that is relevant to the company. In some cases, nominee directors may also be appointed by the court.
Register of Nominee Directors includes the record of the nominee director and particulars of these nominators under the Singapore Companies Act, Cap 50 (CA). In short, a nominee director is either a person chosen and obliged, on account of someone else, to act in a given manner, i.e., in accordance with someone else’s instruction, guidelines, or wishes.
Requirements of incorporated Companies Under the Companies Act
The business must keep the nominee director’s database either in paper or electronic format and cannot be filed with ACRA.
In practice, the nominee director must inform the company of his nomination status within thirty calendar days of the date of incorporation or establishment of the company if he entered the business on or after March 31, 2017.
If the company was incorporated before March 31, 2017, the nominee director has 60 days after the end of the 60-day period in March 2017 to notify his company of his circumstances and provide the details.
If a nominee director’s status changes, he has thirty days from the date of notification to inform the changes in his organization.
The company should gather and file any certificates, awards, or documentation proving a director’s service in the company, with the Registrar of ACRA, or any government authority.
The benefits of having a nominee director
A nominee director is an individual who is appointed to a company’s board of directors on behalf of another party. The benefits of having a nominee director include:
The ability to have someone with expertise and experience in a certain area to offer guidance and advice to the company. This can be especially helpful for start-ups or small businesses that may not have the internal resources to consult with on specific issues.
The ability to maintain control over the board of directors. This can be important for shareholders who want to ensure that their interests are represented and that key decisions are made in accordance with their wishes.
The ability to add an additional level of protection for the company. A nominee director can help shield the company from personal liability in the event that something goes wrong.
The duties of a nominee director
The role of a nominee director is to act on behalf of the shareholders of a company. They are responsible for the management of the company and its affairs. The nominee director is appointed by the board of directors and their term lasts for as long as the board decides.
Nominee directors are an important part of a company’s board of directors. They help to ensure that the board is representative of the shareholders and that the board makes decisions in the best interests of the company. They also help to ensure that the board is independent and objective.