The Role Of Directors And Responsibilities Of Directors

The good corporate governance is regulated by the Australian Securities and Investment Commission (ASIC), which include specific director's duties that director must follow to enhance the well practice within the

Section 184 of the Corporate Act, imposes criminal liabilities on directors, which covers situations where directors are reckless, intentionally dishonest and cause detriment to the company. Directors have a responsibility to their company and shareholders, which is to honestly believe that they are acting in the best interest of the company and for a proper purpose at all time. In s 184(1) of the Corporations Act, directors must always act in good faith and for the best interests of the company. The good faith and interest provisions are civil obligations as well under s 181 of the Act. However, a director or officer will be committing a criminal offence if he or

S180(1) of the Corporations Act 2001 Commonwealth (hereinafter referred to as The Act) states that a “director or officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they:

Directors’ and officers’ duties Corporations Act (ss 180–184 and 588G) states that a director or other officer of a corporation must exercise their powers and discharge their duties with the degree of

Directors’ duties in Australia 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 (A Guide to Directors’ Duties and Responsibilities, 2008). In the case of OHS Solutions Pty. Ltd. in order to give advice it must first be known what are the duties and responsibilities of a director and officer. There are three sources of law in which directors’ duties are enforced: the common-law (judge made), the Corporations Act 2001 (Commonwealth) (the “Corporations Act”) and a company’s constitution (A Guide to Directors’ Duties and Responsibilities, 2008). There are both general law and statutory law duties that are owed by the director to

The law of Directors Duties stems from the systems of corporate governance in order to ensure that the persons occupying higher positions within the company will take good care of the company, as well as not act in a way that will create deficiency. There are 3 sources to the legal duties: the common law; the principles of equitable fiduciary duties; and the statutory duties stated under the Corporation Act section 180-183(Harris,J., 2008).

Normally, the companies board structure which characterized by one single board contain both executive and non-executive directors. The directors are working

One of the duties that company directors need to comply with is fiduciary duties. This is so as company directors are said to be in a fiduciary relationship with the company. When directors are in a fiduciary relationship with the company, they are prohibited from doing any acts deemed prejudicial to the company. In other words, by applying the judgment in Hospital Products Ltd v United States Surgical Corpn, directors cannot and should not use his position to receive personal gains.

• Gower and Davies’ Principles of Modern Company Law, Even if you do not purchase a copy of this book it is highly recommended that you read this comprehensive coverage of modern company law.

Over the twentieth century, with the rapid development of companies in which have became the dominant force in UK’ economy. Thus, Act of 1948 was insufficient to address the raised problems about accountancy. In 1948 enacted another featuring Act, companies are forced to prepare the balance sheet and profit and loss account. The company Act 1977 is the 1948 extended legislation that gave shareholders more power to involve in the company;s affairs, especially, the director could be removed by the shareholders with a simple majority vote.

Section 76 of the Act includes in the definition of directors alternative directors, prescribed officers, or a person who is a member of a committee of a board of a company, or of the audit committee of a company, irrespective of whether or not the person is also a member of the company’s board. A prescribed officer, as defined in section 1, as ‘any person who, within a company, performs any function that has been designated by the Minister in terms of section 66(10).’ The Act does make a distinction between the different types of directors, but there are important distinctions made in practice .

Corporate governance is founded on laws, policies, processes, systems and behaviours and together they provide a system for the way in which an organisation is directed, administered and controlled. As such, the Charity Commission, (the ‘Commission’) recognises that to deliver its strategic aims, objectives and priorities successfully, it needs sound corporate governance arrangements in place, (Charity Commission UK). Corporate Governance is not - or should not be - about debate and discussion on executive compensation, shareholder protection, legislation and so on. In recent times, corporate governance became not only a subject of fierce debate and public outcry, but also, as a result of this and arising legislation, a subject which been wearisome for many company directors. The hidden gem here is to a great

Two main sources of directors’ duties are equitable fiduciary duties from general law and duty of care from New CO (Cap622) s.465. Companies Registry published “A Guide on Directors’ Duties” to generalize 11 directors’ principles including duty to exercise care, skill and diligence, duty to avoid conflicts between personal interests and interests of the company and duty not to gain advantage from use of position as a director.

♦ Monitor management performance. ♦ Map out the mechanisms for internal and external liaison and communications. ♦ Define how the Board will operate including: What information or reports it requires on a monthly or quarterly basis. How, with what data, and by what means, it will constantly monitor management performance and the financial progress of the company. How it will evaluate its own performance at least once every year. ♦ Ensure that the company is properly managed and for the attainment of lawful objectives. ♦ Ensure that the company’s affairs are not managed or conducted in a manner oppressive to any of its shareholders or for fraudulent purposes. ♦ Ensure that the company complies with all statutory requirements.

A director is expected to act honestly, diligently and faithfully in the best interest of the comp- any. This duty is however relative. What happens to be in the best interest of the company to a director may differ from the shareholders view. In the case of Park v. Daily Times Ltd., the court held that the directors had acted improperly and not bonafide for the company’s interest, when they made redundancy payments to the company’s employees on the cessation of the company’s business.