We are often asked what the Director’s Duties and Obligations are, and this has now been clarified in Guideline 1 of 2025, which details the consequences of non-compliance of Directors’ duties, including the:
- Duty to Act in Good Faith and for a Proper Purpose: Directors must act in the best interests of the company, and avoid conflicts of interest and not use their position to gain personal advantage.
- Duty of Care, Skill, and Diligence: Directors are expected to perform their functions with the care, skill, and diligence that may reasonably be expected of a person carrying out the same functions in relation to the company.
- Duty to Act Within Powers: Directors must act in accordance with the company’s constitution and only exercise their powers for that purpose.
- Duty to Avoid Conflicts of Interest: Directors must avoid situations where they have, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.
- Duty Not to Accept Benefits from Third Parties: Directors should not accept benefits from third parties to not do (or not doing) anything as a director.
- Duty to Declare Interest in Proposed Transaction or Arrangement: Directors must declare the nature and extent of any interest, direct or indirect, in a proposed transaction or arrangement with the company.
We urge you to contact us should you need any guidance.
