duties of directors Flashcards
what are the duties of directors
(7) power, skill, conflict, no benefits, judgment, promote success, declare interests
duty to declare interest in transactions or agreements
if any interest or potential interest arises from a director for a transaction or agreement directly or indirectly related with the company, the director must then declare the extend of the interest to the other directors
duty to exercise independent judgement
directors are required to always use independent judgement when making decisions and not fetter their discretion unless otherwise stated in the company’s constitution or other agreements
duty to promote the success of the company
directors are required to act in a way they consider, ‘good faith’, and potentially promotes the success of the company for the benefit of its members as a whole. this includes, long term business decisions, to foster good business relationships, the best interests of employees, the impact of the business to the environment
duty to act with care, skill and diligence
directors must perform their functions in a way that a reasonable person would perform them, if he had the general knowledge and experience that may be reasonably expected from a person that hold the position of a director with skills, care and diligence
duty to act within power
directors must act in accordance to the company’s constitution and exercise the powers of a director for their expected use.
duty to avoid conflicts of interest
directors must avoid any situations that have or may have a direct or indirect conflict or possible conflict of interest with the company. this included the use of property, information or opportunity.
duty to not accept benefits from a third party
directors must not accept any form of benefits from a third party that arise because he holds the position of a director or because he can do or not do anything as a director.
