Question

Section 191 of the Corporations Act 2001 (Cth) imposes a duty on a director to disclose to the other directors any “material personal interest”? What is “material personal interest”?

	a.	An interest that relates to the affairs of the company.
	b.	A personal interest that will be substantially affected by a decision of the company.
	c.	An interest from which the director stands to benefit personally.
	d.	All of the above are correct.

question 2

The statutory business judgment rule allows the directors the benefit of a presumption that they are not in breach of which of their duties?

	a.	The duty to act in good faith in the best interests of the company.
	b.	The duty to exercise powers for a proper purpose.
	c.	The duty to act with care and diligence.
	d.	All of the above.

Answer 1

1. Option (a)

Material personal interest—director's duty to disclose

A director of a company who has a material personal interest in a matter that relates to the affairs of the company must give the other directors notice of the interest.

2. Option (d)

The business judgment rule is a presumption that in making a business decision, the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.