Duties of Directors under Company Act

Board of directors
The board of director is the body of elected or appointed members who jointly
oversees the activity of the company
Duties of directors
 A director of a company shall act in accordance with the Articles of the
company.

 A director of the company shall act in good faith, in order to promote the
objects of the company

 A director of a company shall exercise his duties with due and reasonable care,
 Director is liable to act in good faith and do what he believes.
 They must exercise the assigned powers only for the benefit of the company
 Directors must insure that the annual financial statements (balance sheet,
income statement) are prepared properly and are open for inspection at the
annual general meeting.
 Directors are responsible to attend all the meetings and training sessions
Fiduciary duties
Directors have a duty in law to act in good faith for the best interest of the company.
This include a duty to:
 Act properly
 Not make secret profits
 Avoid conflict of interest
Constitutional and contractual duties
 Directors have a duty to act in accordance with any constitutional or contractual
agreements.
 Examples of these include:
 Memorandum of Association
 Articles of Association
 Shareholder Agreements
 Employment Agreements
 Staff handbooks
Role of directors
 The board is the highest policy making body in a corporation.
 Review the performance of management
 Set company values and standard mission, vision, code of conduct for
management and employees.
 BOD lies between shareholders and management
 They work as a bridge between these two groups

Responsibility of director
 Ensure effective organizational planning
 Ensure adequate resources
 Enhance organizational public image
 Asses its own performance
 Caring for shareholder interest