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Directors – Dealing with Conflicts of Interest #2

Where there is material conflict, voluntary resignation may be an option that has to be considered.

Section 156 of the Company’s Act sets out disclosure requirements. These should be reflected in the company’s Constitution as well.


1. Disclosure of transactions with the company

This is where a director is interested in a transaction that the company is considering or about to undertake. In such a situation, the disclosure should be made to the Board during a director’s meeting and the disclosure must be recorded in the minutes of the meeting.


2. Disclosure of (possible) conflict by virtue of holding other positions

This will be a situation where the director’s interest in another office, property or position is in (potential) conflict with the office he currently holds.


What do you do in such situations?

You should declare the (potential) conflict to the company secretary. The secretary should then inform the Board of Directors of the (potential) conflict as soon as such notification can be done. At the next Board meeting, the director should then make full disclosure of the (potential) conflict. This disclosure must be documented.

Depending on the level of conflict, the Board or even the director may even decide that the conflicted director should not be present at the Board Meeting where the issue of conflict is discussed. This issue may be catered for in the company’s Constitution. The director and the Board should be so guided. The conflicted director obviously cannot vote on the issue.

Where there is material conflict, voluntary resignation may be an option that has to be considered.

There have been cases in Singapore where directors have been convicted for failure to disclose the conflict, so this is one area that you need to pay attention to.

Please note that this article does not constitute express or implied legal advice, whether in whole or in part. If you require legal advice, please contact us at: or


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