The Singapore Ministry of Manpower (MOM) has recently introduced a new requirement for Employment Pass (EP) holders to obtain a Letter of Consent from the MOM before they are able to take up external directorships with other entities. Is your company compliant?

Letter of Consent requirement

Companies who wish to appoint an individual employed by another company on an EP to their Board of Directors will now need to obtain the MOM's approval to the appointment by applying for a Letter of Consent. This requirement was introduced in November last year, but has immediate effect.

The process of applying for a Letter of Consent is expected to take up to 5 weeks. Companies submitting the application will need to do so using the MOM's iSubmit process. Notably, the EP holder's employing entity will be required to confirm that it has no objections to the EP holder taking up a directorship with the company in question as part of the application process.

The MOM has stated that it will only grant Letters of Consent in respect of directorships with companies related by shareholding to the EP holder's employing entity, or otherwise if the EP holder is taking up the directorship for purposes related to his or her primary employment.

Compliance

Companies and employers should consider:

1. whether any members of their Board of Directors are EP holders, and if so whether approval from the MOM has been obtained;

2. whether any of their employees are directors of any other companies, and practically what procedures or processes are in place to keep track of this;

3. what criteria will be used to assess whether an EP holder's external directorship is being taken up for purposes related to his or her primary employment; and

4. whether there are any policies in place setting out guidelines for employees who wish to take up external directorships, including whether such employees will be subject to disciplinary action if they are found to be noncompliant with the above requirements.