roles and responsibilities of a nominee director

What Are The Roles and Responsibility of a Nominee Director?

A nominee director, also known as a local or resident director in Singapore, is an official who’s appointed by a company’s shareholders to sit on the board on their behalf. This typically occurs when the majority investor is an institution, with the contractual rights to occupy one or more seats at the managerial level. Investors may also wish to appoint resident executives with particular skills or experience to represent them when making decisions for the company.

Roles and Responsibilities

a) Overseeing the Company’s Business and Affairs

The duties of a nominated executive do not diminish simply because they have been appointed by a shareholder. Therefore, they still play a major role in setting strategy and structure for the corporation. The executive is charged with reviewing and assessing present as well as future opportunities, including threats or risks in the business environment that may affect operations.

He/she also determines strategic options, chooses those that are to be pursued due to better future prospects and also determines the best techniques for implementing or supporting them. Furthermore, they ensure that the firm’s management structure and capacity are appropriate for putting into operation the recommended strategies.

b) Providing Relevant Information to the Nominating Shareholder

These directors are typically enlisted to the board so that their appointing investor can have a certain level of control over company affairs. Therefore, it’s common practice for them to forward appropriate internal information to the nominating body for review.

While there’s no single rule on when or how an appointee executive can relay these details to shareholders, unless otherwise allowed, the executive must not reveal information to their appointing authority that directly touches on the firm’s dealings with that particular shareholder.

Therefore, if the investor’s interests differ from company policies then resident directors should always proceed cautiously, and preferably act in the corporation’s sole interest instead of any particular shareholder.

c) Exercising Accountability and Responsibility to Appointing Stakeholders

The executives are required to ensure that communication channels between stakeholders and other players are open. They should also understand as well as take into consideration the interests of their nominating stakeholders, plus other company shareholders in equal measure and with mental clarity to make wise decisions for the firm’s general benefit.

Nominee directors often monitor rapport between different parties in the company, by gathering and assessing information about their daily dealings. Basically, they help promote the goodwill and support of all stakeholders in the business.

d) Developing Company Vision, Mission, and Values

Since resident directors sit on the company board, they often work together with other managers to develop corporate vision and mission for guiding or setting the pace for current operations as well as future investments.

The appointee executives determine or review factors such as corporate goals, policies and general culture to be inculcated throughout the business.

e) Ensuring that Books of Account are Safely Kept

One of the responsibilities of these experts is ensuring that appropriate books of account are safe-kept for transparency purposes. In some cases, the executive may be required to assist in paying off debts for the company, even though it’s legally considered a separate entity.

For instance, if the individual tries to ‘trade out of a certain difficult situation’ by borrowing money from the company, they may be found guilty of ‘wrongful trading’ or acting in a manner that solely benefits them and is required to reimburse the debt.

Therefore, a resident director must always exercise their bestowed responsibilities for a ‘proper/moral course’, which is in furtherance to the basis by which they were provided those powers by the appointing shareholders in the first place.

It’s required of them to act in good faith at all times in the company’s best interests, and not for any other ulterior motives. Moreover, in case there’s a conflict of interest between the firm’s interests and the executive’s, the nominee manager must always act in favor of the company.

In conclusion, while a nominee director is not formally appointed by the company for managerial tasks, they are still considered directors by law so long as they discharge the firm’s executive roles. Nevertheless, the individual still owes certain legal duties to the company that is based upon confidentiality, good faith, openness and always considering the corporation’s best interests first before anything else. A nominee executive should also be diligent in performing his/her duties.

how to write a business plan for your new business venture

How to Write a Business Plan for Your New Business Venture

What’s a Business Plan?

A business plan is an elaborate document written to evaluate all the economic aspects of a venture including its description, viability, and analysis. Regardless of the company size, you need to prepare this document. Even though it does not guarantee business success, it helps maintain a clear assessment and provides a roadmap that can lead to business success.

It is time you roll up your sleeves and put the plan on paper. Creating the plan for your business is an essential step for every entrepreneur, both small and large. This is often skipped, but plays a significant role in business success. The following stages show what you need to include in the document.

1. Executive Summary

This section outlines the business strategy and comes immediately after the title page. This part tells the reader what your intentions are in a summary format. State in clear terms what you want at the beginning.

2. Business Description

This section begins with a short description of the industry you operate or intend to operate. Include the present industry outlook and the future possibilities. Ensure to provide all relevant information on the markets within this industry, and new product developments indicating how it will affect your business.

3. Marketing Strategies

After a thorough marketing analysis, you should include this section to show how well you as the entrepreneur is familiar with every aspect of the market you intend to operate in. It illustrates how you define the market and how you plan to position the company to capture a significant market share.

4. Competitive Analysis

Every business should be aware of the strengths and weaknesses of the competitors around them. This section outlines these strengths, weaknesses, and the strategies to position the company to build a competitive advantage. It also includes the barriers you intend to create to prevent the entry of competitors into your market. Remember to include all the weaknesses you can exploit in the product development cycle.

5. Design and Development Plan

In this section, you should provide the prospective investors with a description of the product design and the context of its production, and marketing. Create a budget for the development to enable the business reach its goals.

6. Management Plan

The purpose of this section is to describe how the company will operate and be managed at every functional level on an ongoing basis. Outline the logistics, the various responsibilities and task assignment within the enterprise. Include the capital and expense requirements for the operations.

7. Financial Plan

At the end of the business plan, you need to table the financials. This includes all the plans for the company ranging from capital investments to recurrent operational expenses you intend to incur in the first year or so of the enterprise.

Essential components of a business plan

  • A sound business concept. You need to begin with the right business by working with someone who understands the business you intend to get into. Many people do realize when it is too late that the concepts in the plan have a huge difference with realities on the ground.
  • Understand your market. The best way to understand the market you want to operate in is by carrying out test marketing of your product or service before you go too far.
  • A growing and stable industry. The industry you plan to raise funds for should be one that has the potentials to make profits in the short term and not some great invention that may take years to make marketable.
  • Capable management. The people you intend to work with in the business should be those with excellent skills, ethical values, and are smarter than you are.
  • Detailed and comprehensive financial plan that covers all the aspects of the business.
    What to do after writing the plan
  • Regularly review the document as the business progresses and faces various challenges. The strategies will always evolve depending on business growth and changes in the business environment. This will help you focus on your business goals.
  • Distribute the plan to the right people without letting your competitors see it. It is the business blueprint charting the direction to take, therefore when you and the stakeholders understand it; your plans will have a better chance of succeeding.
  • Protect the plan by having third parties sign a non-disclosure agreement. This will keep those you share it with from disclosing the details of the plan.