A recent case making news — involving a woman left unable to resign as a nominee director after her foreign clients failed to appoint replacements — has drawn fresh attention to Singapore’s directorship framework. Disputes Partner Ong Pei Ching was interviewed by Lianhe Zaobao to provide insights.

Pei Ching said: “Nominee directors bear the same fiduciary duties and statutory obligations as other directors. Even though in practice they may not be the ones making business decisions, they still bear the corresponding legal responsibility.”

The woman at the centre of the case had served as a nominee director for client companies, fulfilling Singapore’s legal requirement that every locally registered business have at least one resident director. When she left her position, several of the foreign clients for whom she had been appointed failed to name replacement local directors. As a result, she remained officially listed against these companies in the Accounting and Corporate Regulatory Authority registry, unable to resign.

Under Section 145(5) of the Companies Act, a director’s resignation is deemed invalid if it would leave a company without a locally resident director. This safeguard is designed to preserve accountability, particularly where the remaining directors are based overseas and harder to reach for regulatory purposes.

The unresolved directorships affected her ability to secure new employment and exposed her to potential liability for companies in which she no longer had any real involvement.

Pei Ching said the case points to a broader gap worth addressing: the absence of a clear exit mechanism for nominee directors caught in unforeseen circumstances, such as a foreign founder becoming unreachable.

This is an area worth reviewing, she added, though any such mechanism should be premised on the nominee director having conducted proper due diligence before accepting the appointment, and having fulfilled their duties diligently while in the role.