Please contact us if you require assistance Duty not to improperly use inside information or position A director must not make improper use of his or her position or information acquired through that position, to gain an advantage for themself or any other person or to cause detriment to the company.A director’s improper use of his or her position may arise irrespective of whether the director intended the impropriety to have a certain outcome.In order to be appointed as a director, the director must sign a notice consenting in writing to be appointed as a director of the company.
(Cth) (CCA) affects almost every aspect of the day to day running of a company and regulates such areas as product liability, consumer protection and competition policy.
Depending on the circumstances, where a company has contravened a provision of the CCA, directors of that company may be found to be personally liable.
Duty to keep proper accounts and records Each director is required to ensure the company prepares a financial report and a directors’ report each financial year.
While small proprietary companies may be exempt from lodging all the information required of larger companies, each director must inform themselves of accounting and recording obligations. A director may personally become liable in certain circumstances for breaches of the law by the company.
All directors must, as soon as they become aware of a conflict of interest, notify the board of such conflict.
Directors of proprietary companies, however, need not give notice as to the conflict, provided the other directors are fully aware of the nature and extent of the director ’s conflicting interests.
Duty not to abuse a corporate opportunity Similar to the duty to disclose material personal interests, a director has a duty not to take advantage of a corporate opportunity for personal gain and at the expense of the company.
Only where such an opportunity is properly considered and rejected by the company can a director pursue the opportunity personally, pending the necessary disclosure requirements.
This duty demands more than a general sense of honesty, it requires directors to exercise independent judgment in light of relevant facts, materials and other views when assessing the best interests of the company.
Importantly, a breach of this duty that involves fraud, dishonesty and even recklessness may attract criminal penalties.