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.

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).

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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

• Explore further articles about outsourcing, employee share plans, tax planning and more.
• Contact BoardRoom directly.

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.

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.

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:

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