eGuide to CG Code

Boards should generally avoid approving the appointment of alternate directors. Alternate directors should only be appointed for limited periods in exceptional cases such as when a director has a medical emergency. If an alternate director is appointed, the alternate director should be familiar with the company affairs, and be appropriately qualified. If a person is proposed to be appointed as an alternate director to an independent director, the NC and the Board should review and conclude that the person would similarly qualify as an independent director, before his appointment as an alternate director. Alternate directors bear all the duties and responsibilities of a director.
 
A. Explanation

This Guideline provides guidance on the appointment of alternate directors.

An alternate director is generally a person who is appointed to attend Board meetings on behalf of a director when the latter (usually referred to as the principal director) is unable to attend.

Section 4(1) of the Companies Act defines a “director” to include alternate directors. They are therefore directors under the law as well. The fact that they fully bear all the duties and responsibilities of a director is reemphasised in this Guideline.

To be able to appoint alternate directors, the company’s constitution must expressly provide for the right to appoint alternate directors. In the absence of such an express right, the directors may not appoint alternates for themselves.

This Guideline generally discourages the appointment of alternate directors on the basis that a director should take on a directorship appointment only if he is able to commit the time to discharge the duties of a director, one of which includes attending all Board meetings.

The Guideline goes further to say that the appointment of an alternate director should only be for limited periods in exceptional cases, for example, when the principal director has a medical emergency.

Even though the alternate director may only be a stand-in, the Guideline requires that he be properly qualified for the task, even if he is standing in for an ID.

 

B. SGX Disclosure Guide
  • Nil.

 

C. Related Rules and Regulations
  • Section 4(1) of the Companies Act: Interpretation.
  • SGX MR Appendix 2.2(9)(l) and CR Appendix 4C(9)(k): Articles of Association.

 

D. CG Guides
  • Board Guide 5.12: The Alternate Director [Director Duties].
  • NC Guide 1.3: Terms of Reference [NC Composition].
  • NC Guide Appendix 1C: Sample NC Terms of Reference [NC Composition].
  • NC Guide Appendix 3C: Types of Directors [Nomination and Appointment Process].
  • NC Guide 6.4: Director Evaluation [Board and Director Evaluation].

 

E. Related Articles
  • Nil.

 

eGuide to CG Code
Overview
Board Matters
Principle 1
Guideline 1.1
Guideline 1.2
Guideline 1.3
Guideline 1.4
Guideline 1.5
Guideline 1.6
Guideline 1.7
Principle 2
Guideline 2.1
Guideline 2.2
Guideline 2.3
Guideline 2.4
Guideline 2.5
Guideline 2.6
Guideline 2.7
Guideline 2.8
Principle 3
Guideline 3.1
Guideline 3.2
Guideline 3.3
Guideline 3.4
Principle 4
Guideline 4.1
Guideline 4.2
Guideline 4.3
Guideline 4.4
Guideline 4.5
Guideline 4.6
Guideline 4.7
Principle 5
Guideline 5.1
Guideline 5.2
Guideline 5.3
Principle 6
Guideline 6.1
Guideline 6.2
Guideline 6.3
Guideline 6.4
Guideline 6.5
Remuneration Matters
Principle 7
Guideline 7.1
Guideline 7.2
Guideline 7.3
Guideline 7.4
Principle 8
Guideline 8.1
Guideline 8.2
Guideline 8.3
Guideline 8.4
Principle 9
Guideline 9.1
Guideline 9.2
Guideline 9.3
Guideline 9.4
Guideline 9.5
Guideline 9.6
Accountability and Audit
Principle 10
Guideline 10.1
Guideline 10.2
Guideline 10.3
Principle 11
Guideline 11.1
Guideline 11.2
Guideline 11.3
Guideline 11.4
Principle 12
Guideline 12.1
Guideline 12.2
Guideline 12.3
Guideline 12.4
Guideline 12.5
Guideline 12.6
Guideline 12.7
Guideline 12.8
Guideline 12.9
Principle 13
Guideline 13.1
Guideline 13.2
Guideline 13.3
Guideline 13.4
Guideline 13.5
Shareholder Rights and Responsibilities
Principle 14
Guideline 14.1
Guideline 14.2
Guideline 14.3
Principle 15
Guideline 15.1
Guideline 15.2
Guideline 15.3
Guideline 15.4
Guideline 15.5
Principle 16
Guideline 16.1
Guideline 16.2
Guideline 16.3
Guideline 16.4
Guideline 16.5
eGuide Glossary
Disclosure of CG arrangements
The Role of Shareholders

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