In general, directors’ duties are set out under the Corporations Act 2001, which governs the way in which companies are run.
The board of directors are responsible for a company’s money and assets and act in the company’s best interests. Directors are duty bound to:
• exercise their powers with due diligence;
• act in good faith in the best interests of the company;
• not make improper use of their board position;
• not make improper use of information they have access to in their position;
• not allow the company to trade while insolvent;
• keep adequate financial records; and
• disclose matters relating to the affairs of the company in which they have a material personal interest
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The Corporations Act provides defences where directors may be in breach of duties, including when they have relied on third-party advice or where a director has made a ‘business judgement’…
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The Australian Institute of Company Directors (AICD) is a not-for-profit membership organisation for directors. The AICD advocates policies on issues of interest to directors and represents members on these issues.
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