Duty Of A Service Relationship

According to UK Law, the directors should act in good faith in the interest of the company, and exercise care and skill in carrying out their duties. The Company Law Reform Bill (2005) defines, in section 154-161, the directors’ duties as follows:

Equitable principles for directors were developed from fiduciary duties applied to trustees through common law. A director has a fiduciary duty to ensure that no conflict of interest exists between him and the company. This common law principle “the no conflict rule” was established in Keech v Sandford.7 Upholding this, Lord Cranworth LC held in Aberdeen Railway Co v Blaikie Bros,8 “And it is a rule….no one....shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect.” This principle was encompassed in the Companies Act 2006:

The duty of care requires a board members to engage in governing and make sound informed decisions about the organization. The duty of loyalty requires a board member to to put the well being of the organization first and ensures that board members do not personally gain from the organization. The duty of Obedience ensures that board members keep an organization in compliance with federal, state and local laws. Board members must ensure the organization is following all regulations, remains committed to the mission and has all the appropriate paperwork filled out properly and submitted on

The Directors and officers shall perform the duties enjoined on them by law and the by-laws of the corporation. They act as agents or representatives of the Corporation in carrying out its rights and obligations provided by law. Directors who directed the affairs of the Corporation in bad faith, gross negligence, and those involving a conflict of interest with their duty to the Corporation shall be liable to the Corporation, its stockholders & other persons. The Board of Directors are not justified to purchase the stocks.

The primary responsibility of directors is to oversee the management of the Company and, in so doing, to exercise their business judgment to act in what they reasonably believe to be the best interests of the Company and its shareholders. In discharging their duty of oversight, directors should give careful attention to the selection of the Chairman and the Chief Executive Officer and should monitor their performance and that of the Company. The Board should

Compliance is everyone's responsibility. Each employee is expected to be aware of the regulatory requirements and what they must do to achieve compliance in the context of their roles. This can be achieved through effective training.

GOVERNANCE. The Board of Directors of a not-for-profit organization is responsible for reflecting on the charitable mission of the organization, give a strategic direction and oversight, and authorize any change to the operations

Proper care and attention should be exercised when undertaking activities, in particular where others will rely on the advice or information offered.

This precept declares that the members of the Board must act in the best interest of the organization ahead of themselves. Some professional firms have requirements of staff that they sit on a nonprofit Board; these constraints put employees in a bad position because they may be in danger of breaching the loyalty duty by joining the Board as a means to appease their employer and/or advance in their particular field.

“When any employee acts contrary to the interests of the stakeholders, particularly the shareholders, she breaches her duty of loyalty.” For example an employee who goes to the news to expose the company’s leaders for fraudulent acts could harm the company and stakeholders ‘interests

The relationship among the many stakeholders and the way an organization is directed and governed is therefore created. Stakeholders might include customers, employees, creditors, suppliers and distributors, the community and the owners at large. The principle stakeholders are the board of directors, managements and employees. The first model of government and non-profit implementation often involves three groups: - executive board, supervisory board, and advisory board whose are appointed by shareholders to run the organization except the last group are bought in as independent experts to assist the company. Hence, what are good practices of corporate governance? How to ensure the directors act in the interests of the public?

A director is obligated to place himself or herself to manage the company . The director must understand the business of the company and the effect that the decisions of the board has on the company. Where the decisions of the company rely on expert or professional advice, then the directors of the company can reply on such advice. There has been a series of cases, which examine

Directors according to (Baxt et al 2005), owe a fiduciary duty to the company. They say fiduciary according to the High Court of Australia is the duty to act honestly, in good faith, and to the best of the directors’ ability in the interests of the company. In this context they note, the director must not allow

This paper will analyze Dr Dawes, Mr Foster, Mr Huckenfusser and Mrs Duck duties in GML are designed to promote good governance and ensure that directors act in the interests of the company including putting the company’s interests ahead of their own. This paper will deal with directors’ duties, obligations, and responsibilities in relation to common law and statutory obligations.

- Code of ethics inside the company requires that shareholders and owners play their role as guarantors of agreement in respect of duties for directors and management.