Singapore Budget 2021 – What Businesses Can Capitalise on to Accelerate Growth in the Post-Pandemic Economic Landscape

Singapore_Budget_2021

Singapore Budget 2021 – What Businesses Can Capitalise on to Accelerate Growth in the Post-Pandemic Economic Landscape

On 16th February 2021, Finance Minister Heng Swee Keat announced the Singapore 2021 Budget.

The budget this year, while focused on COVID-19 support measures, also showcases the government’s foresight as they unveiled several long-term plans such as boosting the global expansion of businesses and scaling of local organisations.

If you have any questions relating to any of the information contained in this report, please contact our tax advisors via email or call us at +65 6230 9788.

Boosting Global Expansion of Business

Boosting global expansion of business

Business Scaling

Business scaling

Tax Support & Changes

Tax support & changes

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Use of Electronic Signatures in Singapore

Use of electronic signatures in Singapore

Use of Electronic Signatures in Singapore

The latest roll out of the Singapore government’s new digital identity platform is yet another move that showcases the tech nation’s commitment to digitalising the country. One of the main features will empower citizens to digitally sign legal documents such as contracts securely. At BoardRoom, where possible, we’ve adopted electronic signatures for years, not only as part of our aim to go paperless but also to optimise our business processes.

What exactly are electronic signatures and when can you use them? Are there any situations in which they may not be legally binding? In this article written by our partner, Virtus Law LLP (a member of the Stephenson Harwood (Singapore) Alliance), they dive deep into the usage of electronic signatures in the highly digitalised society of Singapore.

Use of electronic signatures in Singapore

The global technological landscape is evolving rapidly and various advancements in digital technologies have transformed the way we transact. In the context of the ongoing digital revolution, the Singapore government has announced Singapore’s goal to become a leading Digital Economy. On 5 November 2020, the Singapore government launched a new digital signing service, the “Sign with SingPass“, that allows SingPass users to electronically sign contracts and other legal documentation. This supports efforts to digitise Singapore government services as it allows users to complete transactions with the Singapore government without the need to be physically present to sign documents.  

In light of the accelerated pace of digitalisation precipitated by COVID-19, the use of electronic signatures has become increasingly relevant to businesses. In this article, we will discuss the key issues relating to the use of electronic signatures in Singapore.

Electronic signatures

At the outset, the Electronic Transactions Act, Chapter 88 of Singapore (the “ETA“), which came into force on 1 July 2010, provides for the legal recognition and use of electronic signatures. Under section 8 of the ETA, electronic signatures may be recognised as the functional equivalent of “wet-ink” signatures if the method used (a) can identify the signatory and indicates the signatory’s intention in respect of the contents of the document; and (b) is appropriately reliable considering the purpose of the document or is proven to have fulfilled the requirements in paragraph (a).

Electronic Signatures

While the ETA does not expressly define the term “electronic signature”, it is generally understood as an acknowledgement provided by way of technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.

This, however, is differentiated from a “digital signature” under the ETA, which is subject to further requirements under the ETA.

In determining whether something amounts to an electronic signature, the Singapore courts will generally look at whether the method of signature used satisfies the authenticating function of a signature, instead of whether the form of signature used is one which is frequently recognised.

Without a specific definition of “electronic signatures”, they can possibly take different forms, subject to the legal requirements in the ETA being satisfied. Some examples of electronic signatures may include:

  1. A person typing his/her name into a contract or email containing the terms of the contract;
  2. A person electronically pasting his/her signature (e.g. in the form of an image) into an electronic version of the contract within his/her signature block;
  3. A person accessing a contract through a web-based signature platform such as DocuSign and Adobe, and clicking to have his/her name inserted into the contract in the appropriate place; and
  4. A person using a finger, light pen or touchscreen to sign his/her signature in the appropriate place in a contract.
Excluded Matters
Excluded Matters

There are a number of matters that are excluded (the “Excluded Matters“) from the application of the ETA. This includes, amongst others, the execution of a will, bills of exchange, bills of lading, the creation of a declaration of trust, power of attorney and any contract for the sale of immovable property.

These exclusions mean that, among other things, parties cannot rely on the ETA to satisfy the legal requirements of writing or signatures in relation to the Excluded Matters. It is therefore recommended that any document or transaction that falls within the scope of Excluded Matters should be signed using a “wet-ink” signature.

That being said, the Infocomm Media Development Authority Singapore (“IMDA“) is in the process of reviewing the ETA, to ensure that the ETA continues to be progressive and to strengthen Singapore’s position as a hub for electronic transactions.

One of the proposed amendments is to remove most business-related transactions while retaining personal or familial transactions in the list of Excluded Matters.

On 4 January 2021, the Electronic Transactions (Amendment) Bill (“Amendment Bill”) was introduced to Parliament. The Amendment Bill seeks to adopt (with modifications) the UNCITRAL Model Law on Electronic Transferable Records (2017), which enables the use of electronic transferable records both domestically and across borders, such as bills of exchange, bills of lading, promissory notes and warehouse receipts etc. Consequently, the Amendment Bill seeks to, among other changes, remove such documents from the list of Excluded Matters.

It is noted that the Amendment Bill is part of a wider and ongoing initiative by the Singapore Government to review and support the electronisation of various types of instruments or transactions. We can expect further amendments to the ETA when the legislative and administrative frameworks supporting the electronisation of such instruments or transactions are ready to be enacted or implemented.

Practical issues arising from the use of electronic signatures
Practical Issues Arising From Electronic Signatures

Examples of documents where electronic signatures are recognised pursuant to the ETA include the constitution, minutes of board/shareholders’ meetings, written resolutions, proxy forms, service agreements, resignation letters and solvency statements. This list is not exhaustive. Companies may consult their lawyers or corporate secretarial agents for advice on whether a document may be signed using an electronic signature.

It should be noted that deeds and powers of attorney, which are commonly entered into by businesses, run the risk of unenforceability if executed by way of electronic signatures. We would thus strongly recommend that businesses avoid the use of electronic signatures in this context.

It is not necessary for companies to amend their constitution to expressly provide for the use of electronic signatures to execute documents, as the ETA may be relied upon for this purpose. Nevertheless, to address electronic risks, companies may consider

adopting internal guidelines relating to the use of electronic signatures, such as the method of electronic signatures approved for use by the company and security measures that may be implemented by the company. Companies may consult their lawyers or corporate secretarial agents for assistance in this regard.

To satisfy the requirements for an electronic signature under the ETA, the method of the electronic signature must be appropriately reliable, taking into account all relevant circumstances such as the purpose of the document. Appropriate safeguards should therefore be implemented to address the electronic risks that arise from the use of electronic signatures. We elaborate on this in the next section below.

Electronic risks

Technological advancement can be a double-edged sword. While electronic signatures and records can facilitate transactions for businesses, they are more susceptible to being tampered, modified or forged due to its very nature. For instance, an electronically scanned signature used legitimately in a transaction can be easily copied and used by a fraudster for a different document.

The pertinent challenges that businesses generally face include, without limitation:

  1. whether an electronic record/contract has been altered, modified or tampered with;
  2. whether there are adequate security measures put in place to protect the electronic signatures and electronic records;
  3. whether the identities of the parties involved can be ascertained;
  4. whether the parties involved in the transaction can trust each other due to the lack of a face-to-face meeting;
  5. if applicable, whether both parties have access to the third-party e-signature platforms, whether such platforms are secure, and whether such platforms are willing or able to provide evidence should a dispute arise; and
  6. if applicable, whether the corporate representatives of the parties involved have the relevant authorities to transact on behalf of their principals.
    Electronic Risks

    With these potential challenges looming, the use of electronic signatures should be evaluated with caution, especially with high-value transactions, transactions that require large payments to be advanced or transactions that are concluded entirely online without sufficient verification and authentication.

    Ultimately, one should perform a cost-benefit analysis to determine whether the use of electronic signatures should be adopted in specific transactions.

    There are practical measures, though not fool-proof, that may alleviate the risks of using electronic signatures, including:

    1. performing extensive “know-your-client” checks to assess the risk profiles of the counterparty;
    2. maintaining a list of authorised personnel who are authorised to forward documents signed using electronic signatures;
    3. performing call-back verification with the signatory;
    4. adopting technical security measures such as encrypted passwords and two-factor authentication, including the use of “digital signatures” as expounded under the ETA;
    5. adopting the use of “secure electronic records” and “secure electronic signatures” as expounded under the ETA; and
    6. engaging a Certification Authority who acts like trusted electronic notaries, certifying the electronic identities of users and organisations by verifying and vouching for the identity of the subscribers and providing certificate management services to support trusted and secure transactions.
    A flourishing digital economy?

    The use of electronic signatures in Singapore is no longer in its infancy and should be welcomed especially given Singapore’s vision to become a Smart Nation powered by digital innovation. However, caution ought to be exercised and appropriate safeguards should be implemented to ensure that electronic signatures are securely used.

    Due to the emergence of new technologies such as the Distributed Ledger Technology, Smart Contracts and biometrics, the nature of electronic transactions is also rapidly evolving. New legislative and regulatory developments will therefore arise from time to time, resulting in further implications for businesses, and businesses should keep abreast of these developments so that they can stay ahead.

    Author

    This article was written by Virtus Law LLP (a member of the Stephenson Harwood (Singapore) Alliance).

    Empower your Digitalisation Journey

    Looking for the right partner that understands the need for digitalisation and empowers organisations with innovative technological solutions? Contact our resident experts for more information on how we can assist in facilitating this.

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    The New Approach: 6 Fresh Ways To Mitigate The Employee Impact Of Cost-Cutting Measures During A Recession

    Outsourcing can be an effective cost-cutting measure during economic downturns

    The New Approach: 6 Fresh Ways To Mitigate The Employee Impact Of Cost-Cutting Measures During A Recession

    The New Approach: 6 Fresh Ways To Mitigate The Employee Impact Of Cost-Cutting Measures During A Recession

    We’ve been through recessions and economic downturns before, but this time is different.

    It’s more personal in many ways – yet also more universal. Almost all businesses across the globe have been affected, and the crisis will probably have far-reaching consequences for many years to come.

    Most forward-thinking organisations understand that people ARE their business, and have recently increased their investments in employee wellbeing and welfare accordingly. The recession hasn’t changed the need to attract and retain top talent. If anything, the importance of your people has only multiplied.

    So while cost-cutting measures are essential to weather this storm, mitigating the effects of those measures on your most important resource – your people – is also vital.

    Getting it right is critical. This will require some innovative thinking, because the tried and tested paths are no longer the answer.

    Now is the time for new perspectives on old solutions. It’s time to balance short-term cost-cutting survival with organisational stability and long-term change.

    Below are our top six recommendations for fresh ways to approach traditional measures.

    01 Cost restructuring and reduction

    Cost-cutting measures are as old as downturns themselves. In this new climate, though, these measures need to look considerably different to the redundancy programs of the past.

    They need to strike a balance between the numbers on the spreadsheet and the people-dynamics of your business. There needs to be a recognition that some savings and gains can’t be measured in absolute terms, and that the future of your business can’t just focus on one quarter’s balance sheet.

    The modern approach to retrenchment must be to decide which team members to keep based on who’s most invested in your company’s future. You need to look for business allies and those who create cohesion within the team to reduce future liabilities for poor performance or disputes. While this may not result in the fastest cost-savings, it does provide a much more solid path to business recovery.

    02 Employee share plans

    Cost-cutting measures are incongruous with bonuses and pay rises.

    However, it’s likely that your team has never worked harder and, especially in such a challenging climate, you are keen to show your appreciation for all that they’ve done.

    Employee share plans are an effective solution that have positive long-term consequences for both you and your team.

    This is for two crucial reasons:

    1. You can reward your key staff for their hard work, fostering team loyalty, without incurring extra costs.
    2. You can balance the need to cut short-term costs with incentivising continued employee performance through longer-term reward options.

    In other words, rather than creating a disgruntled team that feels unrewarded, you create a motivated team that’s committed to your organisation’s success. In doing so, you position your business for future long-term growth.

    Plus, when your business succeeds, your employees know they’ll also reap the benefits. It’s a win/win solution.

    03 Government financial support

    Staying afloat during a downturn isn’t always about pulling internal levers to reduce costs. In the current crisis, there’s a wealth of support available from government sources.

    However, navigating this support can be complex. The last thing you want to do is accept government stimulus support that provides short-term help while impinging on the viability of your long-term plans.

    This is an area where an outsourced service provider may be able to offer extra value. Their existing relationships and compliance knowledge can help you to understand your eligibility, along with any implications and complications of each type of support.

    This means you can get the assistance you need now, alleviating your immediate challenges, while also knowing an expert is there to help guide you on the longer-term perspective.

    04 Working capital management

    In an economic downturn, particularly the prolonged one we’re currently experiencing, making the most of what you have is just good business sense.

    Managing your working capital helps you to maintain sufficient cash flow to meet your short-term obligations by using your business assets and liabilities to their best effect.

    Again, this isn’t a new idea. What’s new is taking an approach of layering long-term business continuity with short-term asset analysis and pressing challenges. This enables you to not only plan for now, but also to establish solid groundwork from which you can continue to build.

    This means maintaining a healthy working capital ratio as well as a healthy supply chain.

    05 Effective tax planning

    As the old saying goes, there are only two certainties in life: death and taxes. Effectively planning for one of those certainties (tax) through an economic downturn can help you to avoid the other (death for your business).

    The difference between traditional and modern tax planning is in the balance you strike between cost and minimising tax, and future forecasting and planning.

    While the end of this recession is still not in sight, the end will come. Effective tax planning now will help you to avoid reactivity and steer you towards being strategic. In particular, avoid tax planning outcomes that lock you into untenable situations and bode poorly for your future business viability. Instead, bring together your brightest strategic and financial minds, both internally and externally, to identify opportunities for tax planning that meets both your short- and long-term goals.

    06 Outsourcing back-end services

    Outsourcing isn’t a new concept. There are, however, different ways to approach it. Some of the modern approaches to outsourcing can be the difference between success and failure for your business.

    Yes, there’s always an up-front cost to outsourcing. That said, there’s also an opportunity cost to keeping work in-house: it means losing out on all the value you’d get from outsourcing back-end services.

    For example, rather than having a single payroll employee struggling under the demands of the role, outsourcing gives you access to a dedicated team of skilled professionals. This team will not only be experts in everything relating to your compliance and regulatory framework, but also in broad industry trends. This wider experience and remit can reveal potential cost savings you may not have thought of before. It can also give your business access to wider industry data that you are able to strategically tap into.

    In other words, you’re investing in expertise, efficiency and a streamlined service that you just can’t achieve in-house.

    In the context of a recession, where you might be considering redundancies and layoffs, outsourcing can also reduce the pressure on your remaining employees. Rather than leaving your smaller in-house team to struggle with the same workload, outsourcing to an external team can help them manage the balance.

    Now isn’t the time to let your employee welfare fall by the wayside. Pairing outsourcing with a focus on team wellbeing will create a by-product of business continuity. Your remaining team will feel supported while, at the same time, you’ll be building external relationships to keep core business functions running.

    It’s not just about surviving a downturn

    Surviving and then thriving after an economic downturn requires big-picture thinking. The here and now is important, but so too is long-term business viability. Many businesses who focus on the short-term may make it through the downturn. However, without adapting to a long-term vision, they then find themselves in new, uncharted industry landscapes once the downturn has passed. This makes surviving into the future a significant challenge.

    Where traditional cost-cutting measures focus heavily on keeping the business above water, that’s not enough for long-term, post-COVID survival.

    Now is not the time to focus on costs above all else. The hard work you’ve done to foster a positive employee culture and plan strategically for the future will be key drivers of your company’s success.

    In fact, in the new world order, they’ll be your competitive advantage. Balance isn’t easy, but when you achieve it, it will pay dividends for years to come.

    Want to learn more?

    For more expert advice to help your organisation survive and thrive after the current recession:

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    Singapore (2020) AGM Landscape Trends Report

    Singapore_2020_AGM_Landscape_Trends_Report

    Singapore (2020) AGM Landscape Trends Report

    2020 has been a year like no other with the COVID-19 pandemic disrupting the AGM market. BoardRoom’s dedicated Share Registry team conducted 188 virtual meetings covering various industries across the period of Circuit Breaker & Phase I. The teams navigated the volatility and uncertainty of the conditions and guided clients through an AGM season like never before.

    BoardRoom Annual AGM Thought Leadership Paper FY2020

    FY2020 saw an accelerated digital journey compressed into days and weeks in order to adapt to the new normal as a result of the pandemic.

    This paper sets out our key thoughts, trends and commentary as we reflect on the past and what it means for the future ahead in a post-COVID environment.

    About the Data

    This section sets out the breadth and scope of our paper. The insights and analysis provided here were acquired through BoardRoom’s coverage of our clients where we provided Meeting Services.

    About_the_Data
    Technology

    The pervasive use of technology was amplified this year as observed in the previous themes surrounding our medium of communication, dissemination of information, registration of shareholders, engagement medium etc.

    Some issuers turned to web-based video conferencing software, instead of using a secure webcast.

    Technology_statistic
    AGM Shareholder Engagement
    AGM_Shareholder_Engagement

    Download the Full Singapore (2020) AGM Landscape Trends Report

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    Digital Disruption & BoardRoom

    Digital Disruption

    Digital Disruption & BoardRoom

    Digital Disruption

    We inhabit a world that is being upended by digital innovation. Organisations that have embraced digital technology are insinuating themselves into established industries and have caused sleepless nights for leaders of pioneering firms who are confounded about the response to the emerging developments.

    Many view the phrase ‘digital disruption’ as a negative one and mistake it as an attack on their business and current way of life.

    Really, it is only negative for those who choose to ignore or try to fight it. Those who accept it often find that it can benefit their business in various ways and enhance their growth.

    What is Digital Disruption?

    Digital disruption is a transformation that is caused by emerging digital technologies and business models. These innovative new technologies and models can impact the value of existing products and services offered in the industry. Hence the term ‘disruption’ is used, as the emergence of these new digital products, services and businesses revolutionised the current market and resulted in the need for re-evaluation of traditional market practices. Below are some examples of some technologies or services that have drastically changed the way we work.

    Video streaming took the entertainment industry completely by surprise. Rapidly rising as a low-cost alternative for a select few internet-savvy audiences to watch shows, to eventually driving the cable industry and video rental stores into the ground. Netflix has become the largest subscription video provider in the US, outstripping cable and satellite.

    Ride sharing companies like Uber and Grab have transformed and all but replaced the taxi industry as the preferred commuting choice in a significant number of countries, leaving traditional cab companies trailing in the dust as they try to match the convenience & affordability of ride sharing.

    How has Digital Disruption Impacted BoardRoom?

    The corporate services industry has been slow to ride the wave of digital disruption, but this does not mean it’s not happening. At BoardRoom we have been shaping the industry for years from the introduction of technology solutions like Employee Share Plans and Virtual AGMs to internal initiatives like eradicating the use of paper in our offices. By closely watching the signs as we have been, has allowed us to get ahead of the game and work with the flow rather than against it. Not only does this prevent the wave of digital disruption from driving our successes out of relevancy, it can also lead to further growth and new opportunities.

    Digital disruption typically marks changes in consumer needs and therefore working with the tide allows BoardRoom to fulfil these emerging needs, keeping existing customers happy and most importantly, opening opportunities for new customers to discover what they need from our brand.

    BoardRoom Embraces Digital Disruption

    With the future in mind, BoardRoom has consistently been investing in the adoption of new ideas and technology to ensure that our clients and staff are well-equipped with the optimal tools for success. The nature of the Professional Services industry is the expectation of efficiency and security, both of which centre our decisions on what services we intend to roll out, and what enhances we can make to existing service offerings.

    We have successfully launched several popular services as listed below in anticipation of increased demand:

    Flowchart Digital Disruption

    Virtual Meeting Services: This service ensured that clients can continue to host shareholder meetings with little to no disruption should there be an inability to host meetings physically.

    Electronic-polling: To reduce human error and time spent on manually counting votes, we partnered with Lumi to offer electronic-polling services for optimising meetings.

    Employee Share Plans: Customisation was the keyword when considering how best to assist our clients in their employee equity plans, leading to our customisable Employee Share Plan services with an intuitive branded employee portal.

    Cloud-Based HRMS SaaS: Ignite was launched with the goal of empowering clients through enhanced security and customisation options to curate the ideal payroll solution for their workforce.

    We have come a long way to build BoardRoom as a brand that is ahead of the game and I intend to continue to uphold our value of driving innovation through technology. Through our steadfast dedication to predicting and preparation for the future, the fruits of our labour can be observed in the results produced and through satisfaction of our clients.

     

    Insights by Group Chief Technology Officer, Kelvin Wong

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    Why your Business Needs a Payroll Health Check

    Why your Business Needs a Payroll Health Check

    Why your Business Needs a Payroll Health Check

    Why your Business Needs a Payroll Health Check

    Just like human beings, businesses require regular check-ups on their processes and systems to ensure that any potential risks are promptly dealt with before any issues escalate. One such system prone to going unchecked is payroll. A regular payroll health check helps to identify and prevent the possible risks that can be resolved before they become a serious problem.

    Payroll is the backbone to most companies: essential yet unnoticed, often overshadowed by revenue-generating operational and business units. Generally, low efficiency of payroll can divert precious resources in a business. This can result in the Human Resources (“HR”) department appearing as a cost centre when in reality, an efficient HR team can value add much more to a company’s growth.

    We’ll explore how payroll inefficiency can cost businesses and why a health check of current systems can assist in more efficient business planning.

    Effects of Payroll Inefficiency

    As a business, payroll processes are often determined and then untouched for years, the mindset of “if it isn’t broke, don’t fix it” can be prevalent. In addition to this, many companies use legacy payroll systems that don’t offer the wealth of benefits technology has enabled in this space. However, as companies continue to grow and mature, what works for a small business is not necessarily suitable for larger organisations, or for those who are expanding overseas.

    Some pain points of payroll that might surface as a company grows are:

    • Resource Strain – Time and talent are wasted on tedious administrative tasks instead of business generating activities such as talent management, employee engagement and strategic planning. As the business grows, the resulting increase in administrative tasks can lead to a greater burden on the HR team.
    • Compliance Risks Leading to Potential Penalties – Constantly evolving and vast differences in rules between countries can result in the difficulty of complying with legal requirements. For example; in multi-state countries like China, there are distinct sets of laws governing wage, employee tax and insurance that are specific to the respective province. HR teams need to have an in-depth awareness of the various regulation differences per state and stay up to date with the changes. This can cause an increase in workload and open your company up to risk for non-compliance.
    • Inconsistency of Reporting – Different countries might use diverse templates which could lead to unnecessary frustrations when analysing data across various offices.

    A prompt & regular payroll health check could uncover if your current practices are costing your business valuable time and resources.

    Benefits of a Payroll Health check

    A payroll health check is an assessment that should ideally be conducted by independent payroll experts to identify key risks and potential problems in a company’s payroll practices.

    A professionally executed payroll health check can help to:

    • Garner an independent assessment on how your payroll can be better managed
    • Analyse what your business’s payroll is costing your company
    • Identify a high-level payroll process flow
    • Ascertain the payroll issues exposing your business to risk
    • Tailor payroll solutions to your specific needs
    • Address your concerns about payroll

    Like any other health check-ups, delaying them will make the recovery process longer and more painful than necessary. Catch any risks early and engage a payroll health check right now!

    BoardRoom is currently running a 100% FREE health check to help you maximise the efficiency of your payroll, sign up here now for this exclusive offer before it expires!

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    4 Services that a Top Share Registrar Provides

    4 Services that a Top Share Registrar Providers

    4 Services that a Top Share Registrar Provides

    4 Services that a Top Share Registrar Provides

    Unless you are experienced in working with the capital markets, most would be unfamiliar with the differences between the type of services provided by different Share Registry Services providers. Some basic roles of a Share Registrar that most are aware of would be maintaining the register of shareholders for their listed and unlisted clients and ensuring that all Corporate Actions are processed according to the regulations listed by the Singapore Exchange (“SGX”). However, a top share registrar should go beyond these basic services and add value to their clients by providing a one-stop-shop approach to their service offering. In this article, we’ll discuss the 4 important services a top share registrar should provide.

    01 Provides Secure Processes to Protect Clients’ Personal Data

    An excellent share registrar takes on the task of liaising with regulatory parties such as SGX to ensure important information like the shareholder registers and lists of active shareholders are actively maintained. This is a standard service offering for a share registry provider, however, what differs between service providers are their policies and procedures around Personal Data Protection.

    The information housed in the share register contains highly sensitive personal data like residential addresses and identity numbers, which are considered personal data and in Singapore, personal data is protected by law under the Personal Data Protection Act (“PDPA”). A professional Share Registrar will not only have strict policies and procedures in place to demonstrate compliance to the PDPA, but will also go one step further and showcase Accountability through the appointment of; and regular training of their Data Protection Officer (“DPO”). To learn more about why Accountability in Personal Data Protection is important, take a look at our joint article with the leader in Personal Data Protection governance, Straits Interactive.

    02 Meeting Services: AGMs/EGMs/SGMs

    Under the Accounting and Corporate Regulatory Authority (“ACRA”) all companies are required to hold Annual General Meetings (“AGM”) within four months after their financial year end (“FYE”). An exceptional share registry provider will offer meeting services to ease the stress of arranging for such meetings.

    Other significant shareholder meeting services that a share registrar will provide are Extraordinary General Meetings (“EGMs”) or Special General Meetings (“SGMs”). These meetings are typically irregular and usually called for issues that require immediate resolution such as legal matters. As AGMs and EGMs are often a good gauge for shareholders to judge the company’s status, a successful shareholders’ meeting is crucial to boost stakeholders’ confidence in the company.

    Given AGMs & EGMs involve important stakeholder voting on the passing of resolutions, a holistic package of meeting services should be offered to meet the needs of clients. AGMs and EGMs include several key stages: pre-meeting, during the meeting, and post-meeting, each with its own unique set of needs. We have listed the services an experienced Share Registrar would provide at each stage below.

    Pre-meeting

    • Advise on event planning including the recommendation of vendors for catering, venues and expected timelines
    • Prepare and coordinate the printing and sending of Companies’ Annual Reports to shareholders
    • Process proxy forms and generate reports for clients to get an idea of the general sentiment regarding certain resolutions before the meeting
    • Sourcing of scrutineers if the Share Registrar is the registered Polling Agent
    • Prepare proxy summary listing based on the valid proxy forms received
    • Arrange for site survey and dry-run at meeting venue prior to the meeting (if necessary)

    During the Meeting

    • Managing the attendees through attendance taking and ushering of shareholders
    • Verifying the attendee’s particulars to ascertain their identity as a valid shareholder before admission
    • Providing up to date attendance registration status
    • Run the polling, with support of relevant IT personnel
    • Provide Scrutineering services, provided the Share Registrar is not the registered Polling Agent. If they are, they are unable to provide this service
    • Computation of polling results

    Post-meeting

    • Generation of an official certificate with the resolutions and polling results for the perusal of the Board of Directors and Chairman
    • Generate reports including information on shareholder attendees, audit trails on voting instructions by shareholders, to name just a few

    Outside of this, an experienced share registrar should be pre-emptive and adapt quickly to changes. A good example would be during the COVID-19 pandemic which disrupted the traditional methods of holding AGMs. Social distancing measures made it almost impossible to hold physical meetings, resulting in a need for alternative solutions. Any exemplary service provider should enhance their voting/polling solutions to swiftly cater for Hybrid or Virtual AGMs.

    03 Offers a Variety of Polling Solutions

    There is no “one size fits all” polling service. Share registrars should anticipate the various needs of clients and advise companies on which polling solution is most suitable for them based on factors such as the number of shareholders or the company’s budget.

    Detailed below are the common types of polling services in Singapore today:

    • Manual Polling/Voting – Executed through paper and pen with the share registrar manually counting the votes during a meeting. It can also be a semi-automated process where details and votes are captured electronically on a polling/voting solution. Typically used by companies with a small to medium shareholder base as the time taken can be longer due to the manual work needed as headcount increases
    • Electronic-polling/Voting – Administrated via handsets and smart cards provided to shareholders, a card reader is used to capture information which collates and display results instantly. This is usually engaged by companies with a sizeable shareholder base where speed and real-time polling data is an important factor.

    04 Provides Support for IPO Listing

    Whilst a lot of the services discussed above are post Initial Public Offering (“IPO”), an important role of a Share Registrar should be to support clients through their IPO listing. A professional share registry service provider offers support through advising on the SGX requirements for a successful listing in Singapore. There are many unknowns on an IPO journey, a capable share registrar will have experience across a variety of situations to ensure they can advise the necessary actions for a seamless experience founded on compliance and best practice governance. Some common areas an experienced share registrar can support with are:

    • Backend processes such as IPO application, IPO subscriptions and IPO administration
    • Both local and inbound overseas companies have specific requirements for IPOs, a Share Registrar experienced in regional dealings will be able to safeguard businesses from compliance risks

    Conclusion

    An exemplary Share Registrar should offer an astute suite of services that cater to clients’ needs. They should be proactive in all their dealings and prioritise delivering a service that alleviates administrative burden. A good share registrar can be the make or break for maintaining valuable shareholder relations and ensuring compliance with all local regulations to avoid any potential loss in reputation or monetary fines.

    BoardRoom – Share Registry Services in Singapore

    As one of the leaders and pioneers in the share registry industry, BoardRoom has over 50 years of experience guiding many listed corporations in Singapore, Malaysia, Hong Kong and Australia. Contact our Share Registry Services experts for your personalised consultation and see how we can add value to your business today.

    Wondering what insights and experience a seasoned share registrar can bring to the table? Explore our full report on Singapore 2019 AGM Landscape Trends that we observed from our vast experience in handling a wide range of clients in the 2019 AGM season.

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    The Ultimate Guide to an Employee Stock Option Plan (ESOP)

    The Ultimate Guide to an Employee Stock Option Plan (ESOP)

    The Ultimate Guide to an Employee Stock Option Plan (ESOP)

    Introduction to Employee Stock Option Plan (ESOP)

    We have all heard of an employee stock option plan / employee stock ownership plan or ESOP in abbreviation, but how does an ESOP scheme work in practice, and how do you determine if it’s suitable for your company? In this article, we will provide the basic guidelines of an ESOP plan and how it works so you can see if it might be a viable solution for your business.

    What is an Employee Stock Option Plan (ESOP)?

    An employee stock option plan or ESOP for short, is one form of remuneration given to employees, by means of retaining them or to reward them based on their performance. They are usually offered in the form of company shares which gives the employee ownership rights as a shareholder of the company. As part of an ESOP scheme the employee is able to acquire the shares at a predetermines price, or what we call an exercise price.

    The Lifecycle of an ESOP scheme

    The lifecycle on an ESOP scheme can be broken down into a few events; Offer, Vesting, Exercise, Leaver and Lapse. An employee will firstly accept an ESOP option offering, whereby a fixed number of options will be allotted to them. After a certain timeframe, a proportion of the allotted options will vest, which means that these options can now be exercised.

    To exercise these vested options, the employee will pay the total exercise cost (number of options x exercise price) and receive actual shares of the company thereafter. If they don’t exercise these vested options after the expiry date, these vested options will lapse or expire, meaning the participant can no longer exercise these options moving forward. If the employee leaves the company halfway through the ESOP’s lifecycle, in some cases, all their vested and unvested options will lapse completely. This will depend on the particular company’s employee stock option plan rules.

    Why would companies adopt an Employee Stock Option Plan (ESOP)?

    Companies who want to grow their business whilst mitigating costs will usually adopt an ESOP plan. The this is driven by two primary reasons:

    • Employee performance is directly linked to company performance and thus employee remuneration. Employees can only benefit from their ESOP when the market price of the company is above the exercise price which means that a company needs to grow in order to spur the market price of the share.
    • There is no heavy upfront cost to the company. Cost to the company in this case is only incurred during the exercise of option. Furthermore, the exercise cost will be covered by the employee so it’s a win win for companies looking to grow whilst mitigating costs.

    How do employees benefit from an ESOP?

    When employees are rewarded with shares of the company, they essentially become part owners in the company. This in turn has a direct correlation with employee performance and investment in business performance. The employee’s actions, decisions and work output are all focussed on the greater good of the firm as this is mutually aligned with their own rewards.

    Employee Stock Option Plan (ESOP) Illustration

    To provide an illustration, say on 1st Sept 2019, Mei San has accepted her company’s ESOP 2019 Offer for 900 options with an exercise price of S$ 1 per share. These options will vest annually across 3 years in equal proportions. The expiry date of the options will be 10 years from the offer date, which will be 1st Sept 2029.

    ESOP 2019 OfferVesting DatesOptions to be vestedUnvested OptionsVested Options
    Allotment Day1st Sept 201909000
    Vesting 11st Sept 2020300600300
    Vesting 21st Sept 2021300300600
    Vesting 31st Sept 20223000900

    A few points to take note of in the table above:

    • On 1st Sept 2019, 900 options are allotted but remain unvested, which means Mei San cannot exercise these options
    • On 1st Sept 2020, 300 have vested meaning Mei San can exercise them by paying the exercise cost of S$ 300 (300 Options x S$ 1) to acquire 300 shares of the company
    • After 1st Sept 2029, all vested options will lapse, if Mei San has not exercised them prior to this date she will not be able to do so, they have effectively expired
    • If Mei San leaves the company to join another firm halfway through, all vested and unvested options shall expire upon notice of resignation

    Other variables to consider:

    The illustration above is only one of many examples. Common variables that change include:

    • Inclusion of a performance matrix, where the number of options to be vested will depend on the employee’s work performance
    • More frequent vesting (e.g. Bi-annual), to entice employees with “more” reward
    • Broad-based share option plan where all employees are offered the options plan to encourage ownership thinking across the company
    • Some companies may allow retirees to continue to hold on to their vested options until the expiry date

    Depending on your company’s requirements, you will need to understand the implications of these variables, and whether they can help achieve your ultimate objective of your employee stock option plan (ESOP).

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    Two Direct Methods To Improve HR Efficiency Today

    Two methods to improve HR Efficiency

    Two Direct Methods To Improve HR Efficiency Today

    TWO DIRECT METHODS TO IMPROVE HR EFFICIENCY TODAY.

    Since being coined in 1893 by John R. Commons, Human Resource (HR) has evolved to become a vital part of any thriving business. In a bid to ensure that the company succeeds in its growth and development, the HR department is responsible for its workforce’s productivity and contribution to the company. This means on top of traditional roles like recruitment, training, management of employee benefit programmes, processing payroll, and maintaining overall morale; the HR Department has become a core driver in shaping business success.

    Optimising your HR operations is not an easy task. The continually evolving business landscape is pushing the boundaries of HR capabilities; HR as a whole finds itself in a position where they need to spend more time enhancing performance and less time on traditional administrative work such as employee record keeping or payroll processing. There are many strategies HR Departments can undertake to achieve excellence. Perhaps the most impactful would be the contributions brought about by payroll outsourcing or the adoption of an all in one Human Resource Management Software (HRMS).

    01 Consider outsourcing to a payroll service provider

    Of the many benefits that come with outsourcing payroll, specialised expertise would be the most notable. By outsourcing your payroll, it provides HR with the opportunity to save on time and cost as well as navigate delicate cultural, language, and regulation issues. By engaging a third-party payroll vendor, the HR department can significantly reduce risk and labour.

    Payroll outsourcing reduces cost and saves time.

    Processing payroll in-house is time-consuming. It is delicate work that requires a high level of attention to detail. The stress on workload only rises as the company grows and headcount increases. It is important to remember that payroll is only a subfunction of the HR department and one which is an administrative back-end function. Unlike other strategic functions of HR that can drive business performance such as management of employee benefits, recruitment, and training. Consider the benefits to the business if your HR teams were wholly focussed on these instead of scrutinising considerable amounts of data to avoid miscalculations and errors. It is important to note that the time your department saves by not burdening itself with this duty is reflected in cost savings. So, by outsourcing payroll processing, which includes anything from calculating payroll taxes and statutory filings to handling payroll enquiries and disbursement, you benefit your organisation financially too!

    “Human resource isn’t a thing we do. It’s the thing that runs our business.” - Steve Wynn

    The ongoing costs of the payroll software, additional headcount required for processing wages, managing paperwork, and tax liabilities can add-up to a considerable sum. So, in addition to saving time-cost, by choosing to outsource your payroll functions to a payroll vendor, you could be generating concrete savings to your bottom line.

    All things considered, the actual extent to which payroll outsourcing will assist in reducing your costs depends on your current level of efficiency in administering payroll in-house and of course, the complexity of your payroll.

    Payroll service providers can offer you peace-of-mind when it comes to compliance and data security.

    Staying up-to-date with complicated compliance regulations is an ever-present and real risk that HR teams face when running payroll operations in-house. Even with the most experienced employees, lapses may occur when your department gets busy. Payroll vendors minimise this risk through a dedicated team of experts that operate under stringent protocols and multi-level cross-checking – a process that is often skipped when managing in-house to save on time.

    Another aspect for worry other than compliance would be security. Considered the security of your HR payroll software and data is In an age when data security and personal data protection are at the forefront of conversations it is critical you have the appropriate measures in place to ensure accountability with these matters. You need to consider where your payroll software and data are stored and is this a secure location with ISO certification? Do you have the latest security updates installed and processes in place? In the event of an unfortunate lapse in security or hardware malfunction, the many hours required to recover your data along with the implication of experiencing an extremely sensitive data breach will deal a severe blow to the HR department and your company.

    By contrast, when you outsource your payroll to a top payroll outsourcing company, they will offer highly secure payroll solutions. They do this by storing your data on highly secure cloud-based servers that utilise state-of-the-art encryptions that prevent any unauthorised access. Data-loss worries would also be a thing of the past with backups across multiple server locations. This essentially allows the HR department to eliminate the effort and time cost that comes with constant security monitoring and data protection—in short, peace-of-mind with minimal effort.

    Boardroom payroll HRMS Architecture

    Still need a reason to outsource your company payroll? Here’s 6 more!
    ➤ Read 6 Key Reasons to Outsource Your Company Payroll

    02 Consider a well-integrated and interconnected Human Resource Management System (HRMS)

    There are many reasons why your HR department would want to consider investing in a fully integrated HRMS solution. All-in-one HRMS solutions typically provide a better user experience for all staff (including HR) and swifter access to a broader array of data. According to research conducted by Software Path, it is not surprising that the most popular reason for HR to integrate an HRMS is to increase overall productivity.

    Well-integrated HRMS saves time and eliminates potential human errors.

    Automating your HR processes helps you save time. Having to manage every HR function efficiently is hard work. Payroll management and processing in particular can be needlessly resource-draining. However, with a well-integrated HRMS, a company with about 100 staff can complete its payroll processing in a day or less. And while some companies may already be using an HRMS to process payroll, it is important to note that the lack of a well-integrated system that automates calculation and combination of data between various HRMS modules could potentially bring about greater potential for errors leading to areas of inefficiencies.

    An ideal HRMS would encompass several key modules and automate a swift data-sync process between them. Examples of modules can be: Leaves, Claims, Time and Attendance, Personnel, and Payroll. Remember to review your HR needs and ensure that your HRMS of choice offers a all the required modules. It is important to note that data from different modules are interdependent.

    E.g. payroll processing is dependent on accurate claims data to ensure precise disbursement amount.

    By utilising a well-integrated solution, you can ensure that that there are no lapses or variances in the records that may lead to inaccurate accounting.

    Payroll outsourcing - Leave and attendance
    “One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.” – Elbert Hubbard
    Payroll outsourcing - Overtime and Claims calculation

    By choosing your HRMS wisely, you guarantee peace of mind for your HR department and free-up resources to focus on other functions such as improving processes and securing a strong talent pipeline. In the words of Elbert Hubbard, let your extraordinary people do extraordinary work and leave the machine to do the ordinary work.

    HRMS simplifies employee services

    One of the critical functions of any HR department is employee servicing. The task of supporting employees with basic services such as clarification and generation of essential documents, amongst other things, can be extremely tedious and time-consuming. This becomes exceptionally prevalent for organisations with a massive number of overheads. Needless to say, this causes a drop in the department’s productivity. Top HRMS applications can offer remote access to employees. Some of which even provide mobile solutions which increase accessibility for the modern employee who is always on-the-go. Having such a function provides quick access to general information and documents as well as facilitates an efficient enquiry process without the need to be connected to a physical intranet.

    These are just a couple of ways in which you can significantly increase the efficiency of your HR department and begin moving in the direction of HR excellence. However, outsourcing a vital HR function or adopting an HRMS does not come without its challenges. The department may show signs of resistance for fear of their jobs. Decision-makers must provide clear communications on how these new efforts serve to benefit its people. Furthermore, while there is a chance that jobs and positions could be replaced, new positions will always be created to facilitate outsourcing or integration.

    Have we provided you with the answers you’re looking for? If we haven’t, we’d very much like to do so. Contact our resident expert on increasing HR efficiency here!

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    Register your Data Protection Officer (DPO) via ACRA’s Bizfile

    Register your Data Protection Officer (DPO) via ACRA’s Bizfile

    PDPA & Data Protection Officer

    Personal Data in Singapore is protected by the Personal Data Protection Act 2012 (“PDPA”) which came into effect in 2014. Essentially, the PDPA governs the collection, use and disclosure of personal data legitimately.

    Most organisations in Singapore handle personal data in one way or another.  In order to ensure that such personal data is appropriately safeguarded and responsibly managed, the PDPA stipulates that it is mandatory for such organisations to appoint a Data Protection Officer (“DPO”). 

    The DPO can be an individual or a team and they can be employees of the organisation or an externally appointed third-party.  The key role of the DPO will be to ascertain that the policies and practises of the organisation in relation to personal data comply with the requirements under the PDPA.

    The Personal Data Protection Commission (“PDPC”) in Singapore administers and enforces the PDPA and serves as Singapore’s main authority in matters relating to personal data protection. PDPC has recently collaborated with the Accounting and Corporate Regulatory Authority (“ACRA”) to allow for organisations registered with ACRA to register and/or update their DPO’s name and contact information via ACRA’s BizFile+ using their CorpPass accounts.  With this in place, ACRA-registered organisations that wish to register their DPO details on the PDPC website will now be automatically directed to ACRA’s BizFile+ to do the registration. Non-ACRA registered organisation can continue to register details of their DPO on the PDPC website.

    Though registering details of the Data Protection Officer is not mandatory, it is highly encouraged as this will help DPOs stay connected and keep abreast of relevant personal data protection developments in Singapore to ensure continued compliance with the PDPA. With the shift towards companies demonstrating Accountability towards PDPA and not just passive compliance a DPO is more important than ever. If you would like to know more about what demonstrating Accountability means for your business head over to our article written with PDPA expert Straits Interactive for more information

    Register your DPO via ACRA's Bizfile Now

    Registration and updating of Data Protection Officers’ (“DPOs”) details is now more convenient for Accounting and Corporate Regulatory Authority (“ACRA”) registered companies.

    The recent collaboration between the Personal Data Protection Commission (“PDPC”) and ACRA enables ACRA-registered companies to enrol their DPO under ACRA’s BizFile+ platform instead of the PDPC’s website.

    If you would like more information on this recent change, reach out to our Corporate Secretarial experts today.

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