Final Ch. 23

Question 1

directors # private/public

Answer 1

private must have at least 1

public must have at least 2

Question 2

lay/non-executive director

Answer 2

attends meetings but is not actively involved in running the company

Question 3

alternate director

Answer 3

somebody nominated by an existing director as their representative at a company meeting

Question 4

shadow director

Answer 4

a director who is not technically with the firm but is a major shareholder but doesn’t take part in governing the firm but whose instructions are complied with

Question 5

directors duties (2)

Answer 5

1. duty of care

2. fiduciary duty: act with the utmost good faith

Question 6

transactions by directors which require shareholder approval

Answer 6

1. substantial and material property transactions
2. directors long-term service contracts
3. loans to directors
4. golden handshakes

Question 7

golden handshakes

Answer 7

compensation for loss of job

Question 8

company secretary

Answer 8

principal administrator of a company responsible for ensuring compliance with the companies act

Question 9

insider dealing (defence)

Answer 9

defendants may avoid liability if they can prove that when they entered into the transaction they did not do so with the intention of making a profit or avoiding a loss