Business Law
a) A director is an individual elected the shareholders of a corporation, who carries out certain tasks established in the charter, according to www.thefreedictionary.com. The duties are a series of common law, statutory, and equitable obligations. The duties are analogous to duties owed by trustees to beneficiaries, and by agents to principals. Directors owe duties to the corporation, and not to individual shareholders, employees or creditors outside exceptional circumstances. The duties of a director are divided in two sections, the common law duties and the statutory duties of directorship.
Common law duties;
Duty of Good Faith
The most general obligation of a director is the duty of acting in good faith. This requires a director to always discharge the responsibilities of the office of director honestly, conscientiously, and fairly. It also requires a director to make decisions for the corporations that are in the best interests of all the corporation's shareholders and not for the advantage or benefit of one group over another.
Often a director is put in the position of having to deliver bad news to, or deny information requests from, shareholders of the corporation. Such actions may lead the shareholders to form an unfavorable opinion of the director delivering the message. As a result, a director might be tempted to avoid or delay informing the shareholders, or even to mislead the shareholders, about such news or action in order to avoid falling out of favor with or upsetting them. However, avoiding or delaying an unfavorable message or providing misleading information violates the director's duty of good faith, according to www.maciatyrehudson.co.uk.
Another common violation of the statutorily-required duty of good faith occurs when a director lets personality conflicts, or even the avoidance of such conflicts, get in the way of advising the corporation in a conscientious manner. Unproductive debate or personality clashes at meetings can lead to discord
Common law duties;
Duty of Good Faith
The most general obligation of a director is the duty of acting in good faith. This requires a director to always discharge the responsibilities of the office of director honestly, conscientiously, and fairly. It also requires a director to make decisions for the corporations that are in the best interests of all the corporation's shareholders and not for the advantage or benefit of one group over another.
Often a director is put in the position of having to deliver bad news to, or deny information requests from, shareholders of the corporation. Such actions may lead the shareholders to form an unfavorable opinion of the director delivering the message. As a result, a director might be tempted to avoid or delay informing the shareholders, or even to mislead the shareholders, about such news or action in order to avoid falling out of favor with or upsetting them. However, avoiding or delaying an unfavorable message or providing misleading information violates the director's duty of good faith, according to www.maciatyrehudson.co.uk.
Another common violation of the statutorily-required duty of good faith occurs when a director lets personality conflicts, or even the avoidance of such conflicts, get in the way of advising the corporation in a conscientious manner. Unproductive debate or personality clashes at meetings can lead to discord