Director's Duty

In: Business and Management

Submitted By kiki007123
Words 6268
Pages 26
pwc.com.au

A guide to directors’ duties and responsibilities for non-listed public companies and proprietary companies in Australia

Contents
1 Executive summary 1.1 1.2 2 Sources of company law in Australia Summary 1 1 1 2 2 2 3 3 3 4 5 6 6 6 7 7 7 8 8 9 9 9 11 12

Common law duties 2.1 2.2 2.3 2.4 2.5 2.6 2.7 Duty to act bona fide (In good faith) in the interests of the company as a whole Duty not to act for an improper purpose Duties of care and diligence Duty to retain discretion Duty to avoid conflicts of interest Duty not to disclose confidential information Duty not to abuse corporate opportunities

3

Statutory duties 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Section 180 – Duty of care and diligence and the business judgment rule Section 181 – Duty of good faith Section 182 – Duty not to make improper use of position Section 183 – Duty not to make improper use of information Section 184 – Criminal offences Section 588G – Duty not to trade while insolvent Section 191–195 – Disclosure of material personal interests Section 208–210 – Financial benefits to related parties of public companies Section 285–318 – Financial reporting

3.10 Others 4 5 Company constitution Penalties

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Contents

5.1 5.2 6

Criminal penalties Civil penalties

12 12 13 13 13 14 14 14

Duties in practice – Examples of breaches in Australia 6.1 6.2 6.3 6.4 6.5 The Australian Securities and Investments Commission’s (ASIC) Power to Ban directors ASIC v Adler and Ors ASIC v Rich ASIC v Vizard ASIC v Vines

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1
1.1


Executive summary
Sources of company law in Australia
The laws governing directors’ duties and responsibilities come from three areas: – – the common law (judge-made law) statute law, under the Corporations Act 2001 (Commonwealth) (the “Corporations Act”) a company’s constitution. – – – – – –  This guide deals with directors’…...

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