Comm 101 Tutorial

In: Business and Management

Submitted By natkoh94
Words 615
Pages 3
Week 4 Tutorial Assessments

1. What are three key Australian public company directors’ responsibilities?

A director of a company oversees a company on the behalf of the shareholders of the company. It is under the law stated in The Corporations Act 2001 s198A (1), “the business of the company is to be managed by or under the direction of the directors. All directors have a fundamental legal duties and responsibilities (Australian Institute of Company Directors (AICD), n.d.). A public company must have at least 3 directors (not counting alternate directors). At least 2 directors must ordinarily reside in Australia (Australian Securities & Investment Commission, 2015). Directors are appointed during the AGM.

There are several key responsibilities according to The Corporations Act 2001:

* Improper use of information: they have the duties to not inappropriately use of the information of the company for personal gains that could detriment the company * Care and diligence: to act with the degree of care and diligence that a reasonable person might be expected to show in the role. The same duty is imposed on directors at common law. * Good faith: to act in good faith in the best interests of the company and for a proper purpose (s 181), including to avoid conflicts of interest, and to reveal and manage conflicts if they arise. This is both a duty of fidelity and trust, known as a ‘fiduciary duty’ imposed by general law and a duty required in legislation

If Directors continues to trade knowing that the company will not be able to cover its debts and when they fail, the Directors may be personally liable for debts incurred. In addition they may have committed an offence under the Corporations Law and may be prosecuted by ASIC. Directors may also be personally liable for any outstanding company tax liabilities and/or penalties. If Directors…...

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