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Duty of care, skill and diligence (s213) - Coggle Diagram

- - - - Australian Securities and Investment Commission (accounting experience)
        
        When a person accepts the position of director of a firm, he or she is responsible for ensuring that he or she is aware of the nature of the duties that a director is expected to do. The duties will differ depending on the expertise and skills that the director claimed to have in order to be appointed to the position.
      - Gold Ribbon (Accountant) Pty Ltd v Sheers
  - - - Not obliged to attend all the meeting - or not company would not run smoothly as the meeting requires all directors came, especially for big companies it is difficult
        
        If come to board meeting but did not exercise it, can be held liable
    - - Another Info
        
        A director may rely on information/advice made by (a)-(d) (tapi kena ada independent judgment juga)
        
        Sec 215(2) Reliance deemed to be reasonable if
        made in good faith and after an independent assessment
        
        Planassurance PAC formerly known as Patrick Lee PAC v Gaelic Inns Pte Ltd
        
        Sheahan v Verco
      - Another in exercise of power
    - - Calling a meeting of directors and have his views and protests recorded and take a vote whether the debts should have been recovered
      - As executive director should have given instructions to stop further transactions with the debtors and instruct lawyers to commence recovery of debts
      - Threaten to report to registrar
  - - - Obtain a fundamental understanding of their company's operations.
      - There is a constant obligation to inquire about the company's operations and business activities and to be updated about them. There needs to be a reporting mechanism in place between the staff and the directors.
      - General supervision of the company's operations and attendance at board meetings on a regular basis.
      - Although auditing financial statements is not needed, it is necessary to be familiar with the company's financial status by reading its financial statements on a regular basis.
      - Directors appointed due to their specific qualifications or responsibilities must also pay attention to other parts of the business of the firm that might reasonably be expected to be investigated.
      - Directors cannot shut their eyes on corporate misbehavior and pretend to observe the misbehaviour, and therefore have no obligation to look.