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The core directors’ duties are: - To act in good faith in the interests of the company as a whole - To act within powers - To promote the success of the company - To exercise independent judgement - To exercise reasonable care, skill and diligence - To avoid conflicts of interest - Not to accept benefits from third parties - To declare interests in proposed transactions or arrangements with the company - To obey the law Beyond these core duties, directors also have various duties imposed by other statutes and regulations. For example, duties are imposed on directors in the areas of employment law, health and safety, accounting and reporting, and taxation. The penalties of failing to comply with these duties are generally set out in the individual statutes that impose the duties. Directors’ duties, whether under the Companies Act, the common law or other legislation, must be taken seriously. Serious penalties can apply to directors who infringe their duties. For example, directors can be disqualified for between two and 15 years. Ignoring a disqualification order is a criminal offence for which a director can be fined and possibly imprisoned. Anyone considering accepting the position of director of a company should first obtain legal advice from a commercial solicitor. Ignorance of one’s duties is not an excuse, and therefore it is essential that all directors understand their duties. A commercial solicitor can explain the duties and what must be done in practice to ensure they are met.
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