Will repeal of Section 153 harm board renewal?

WITH effect from Jan 3, 2016, Section 153 of the Singapore Companies Act has been repealed. This section dealt with the age limit of directors and applied to directors who are of or over the age of 70. Unlike other directors, such directors could only be elected directly by shareholders at the annual general meeting (AGM). Further, while other directors generally retire by rotation at the AGM and often only stand for re-election every three years, such directors must be re-elected every year. Section 153 applied notwithstanding anything in the memorandum or articles of the company.

The repeal of Section 153 means that, going forward, directors who are of or over the age of 70 can be appointed, elected and re-elected in the same way as any other director (unless the articles of association require such directors to continue to be re-elected annually).

During the consultation on the review of the Companies Act, the lead author of this commentary gave feedback in support of the repeal of Section 153. Legislation in most developed countries does not contain the equivalent of Section 153 provisions and it is timely that Singapore aligns its legislation with these countries. Today, 70 could be the new 50.