The fiduciary duties of directors

THE office of a director in a company carries with it the assumption of fiduciary duties, which primarily concern the exercise of their powers as agents of the company, and the control of the property and assets of the company as trustees of the company.

A person whose office carries fiduciary duties must at all times act in the best interests of the beneficiaries. Fiduciary duty is the highest duty of care which the law can impose. The duty-holder must subordinate his own interests in preference for the beneficiary's interests in the event of a conflict. In broad terms, a director must at all times act in good faith and with reasonable care and diligence.

The Singapore Companies Act requires a director to always act honestly in the discharge of the duties of his office. The Act does not replace the common-law obligations of directors but supplements them. It also imposes both civil and criminal sanctions on directors by providing that: