Please enable JavaScript.
Coggle requires JavaScript to display documents.
Directors Duties - Coggle Diagram
Directors Duties
-
-
-
-
-
Duty to exercise reasonable care, skill and diligence (s.174)
s.174(2) states that the care, skill and diligence expected of a director is that which would be exercised by a reasonably diligent persons with
The general knowledge, skill an experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company (the objective test)
The general knowledge, skill and experience that the director has (the subjective test)
A director will not breach s.174 if he delegates a function to another person and that person performs the function unlawfully ow with a a lack of skill and care. This is subject to exceptions
The directors must exercise reasonable skill and care when deciding to whom their functions are delegated. If they fail to do so and the delegated functions are performed unlawfully or without due skill and care, the directors could be in breach
The directors are required to supervise those persons to whom they have delegated their powers. A failure to supervise such persons can result in a breach
Although a director can delegate functions, he cannot delegate so many of them that he ends up taking little or no part in the running of the company. A director who is inactive will almost certainly be in breach of the s.174 duty
A director will be required to compensate for any loss it sustains due to his breach of the s.174 duty
Existing arrangements
-
S.182 provides that where a director is in any way directly or indirectly interested in a transaction or arrangement that has been entered into by the company, he must declare the nature and extent of the interest to the other directors
-
-
-