The Companies Act 2014 codifies for the first time the duties of directors.
The principal fiduciary duties of directors are outlined as follows:-
- To act in good faith in what the director considers to be in the company’s interests
- To act honestly and responsibly in relation to the conduct of the affairs of the company
- To act in accordance with the company’s constitution and to exercise powers only for purposes permitted by law
- Not to use company property for their own or others benefit unless approved by the members or expressly stated in the constitution
- Not to fetter discretion to exercise independent judgement unless permitted by the constitution or entered into in the company’s interests
- To avoid conflicts of interest unless approved by members or by the company’s constitution
- To exercise care, skill and diligence, and to have regard to the interest of the members as well as employees
Where a director of a company acts in breach of his or her fiduciary duties, then he or she shall be liable to either account to the company for the gain or, indemnify the company for any loss or damage resulting from the breach.
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