Protecting company directors and officers against litigation risks

LITIGATION against company directors and officers is rare in Singapore, but it remains important to understand the risks that might lead to it, and the possible protections available.

Singapore presents a relatively benign legal environment for individuals who act as directors of local companies. For example, under Singapore law, a director owes duties to the company itself, not to shareholders and creditors.

Only the company can bring an action for breach of duty against a director, even though shareholders may be able to bring a derivative action for breach of duty on behalf of the company. As a result, the incidence of claims in local courts is limited.