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Directors' key responsibilities
— filed under: Company directors
[image] Director’s key responsibilities.
The Companies Act 1993 imposes a number of obligations on companies and their directors. How a company operates is also determined by its constitution (if it has one). A constitution sets out the rights, powers and duties of the company, the board, each director and each shareholder.
A director of a company must not act, or agree to the company acting, in a manner that contravenes the Act or the constitution of the company.
Directors are responsible for managing the company’s day-to-day business. In doing so, directors owe duties to the company, to its shareholders, and to others dealing with the company.
Directors must act honestly, in what they believe to be the best interests of the company, and with such care as may reasonably be expected of them in all the circumstances.
Directors must not carry on the business in a manner likely to create a substantial risk of serious loss to the company’s creditors (“reckless trading”).
Exactly what this involves will vary from company to company. Below are some of the general responsibilities directors have under the Companies Act 1993. Note that this information is general in content and we recommend you seek professional advice, as appropriate.
