Question

(Director’s duties) Directors of companies are agents and therefore are bound to always act in the best interests of the company. What are the most important directors’ duties and how do they ensure that directors act for the company and not in self-interested ways? Please explain giving examples and referring to case law and the Corporations Act 2001 (Cth) where necessary.

Answer 1

Director's Duties :

A company act through two bodies of the people the one is share holder and another is board of directors (BOD) where as BOD are the management of the company business they are responsible to make policies for the companies and also make strategy and operational decision for the betterment .

It is the duty of the director to ensure that company meets its statutory obligation as per design . Director also have the duty to participant in the board meeting to take crucial decision .

It is truly said that directors are agent of the company which are appointed by the shareholder to manage its day to day affair of the company . The basic rule that director act together and also delicate certain power to the individual director or to the committee .

These are the duties of the director :

-the article of the association clearly gives the power to the director for the agreement of constitutional nature .

-it is a duty of the director to work in good faith and proper action is taken in time for benefit of the company .

-directors duty is to promote the policies of the company for its success.

-its also duty to make business relationship with the supplier and the customer .

-for the success of the company companies operation are benefited towards operation and also to the external environment .

-to maintain reputation in the market in order to make high standard is also the responsibility of the director .

-to implement long term plan for the success of the company .

-it is also the duty of the director not to exercise independent judgement under which company enter into contract .

-director must use his skill , knowledge and experience for the success of the company .

-its the duty of the director to direct the conflict of the interest for the benefit of the company .

-to protect the confidential information of the company and to the third party .

-the measure duty is not to accept any benefit from the third party .

-to determine and implement the polices and make decision accordingly .

-it is the duty of the director to call meeting including the annual general meeting of the shareholder .

-to maintain and keep records of the company .

-to prepare and filing statutory document with the companies office .

director must use technical , creative , interpersonal and leadership skill while doing the job to perform their duties well and all efforts are taken for the success of the company .