Director’s Duties: what are they?

Jan 12, 2023 | Publication

A director of a company has a range of legal duties including to make sure the company complies with general and specific laws relating to the company’s operations.

The general duties of a director are set out in the Corporations Act 2001 (Commonwealth).

A director must exercise his or her powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they were a director or officer of a corporation in the corporation’s circumstances and occupied the office held by, and had the same responsibilities within the corporation as, the director or officer.

A director or other officer of a corporation who makes a business judgment is taken to meet the requirements of care and diligence, and their equivalent duties at common law and in equity, in respect of the judgment if they:

1. Make the judgment in good faith for a proper purpose; and
2. Do not have a material personal interest in the subject matter of the judgment; and
3. Inform themselves about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and
4. Rationally believe that the judgment is in the best interests of the corporation.

The director’s or officer’s belief that the judgment is in the best interest of the corporation is a rational one unless the belief is one that no reasonable person in their position would hold.

A director must exercise their powers and discharge their duties in good faith in the best interests of the corporation and for a proper purpose.

We will explore in later articles further the general duties of a director.

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources. If you do not wish to receive newsletters from us, please let us know.

Latest Insights

How does the court assess pain and suffering?

In New South Wales (NSW), the assessment of pain and suffering—referred to legally as non-economic loss—is governed by the Civil Liability Act 2002 (NSW) ("CLA"). This is compensation for the intangible effects of the injury, such as pain and suffering, loss of...

Property Disputes – How Can They Arise?

Property disputes arise in many different ways – not only in commercial contexts but also in residential settings.  Some of the types of property disputes include:...

Can a Child under 14 years commit a Crime?

In New South Wales, the age of criminal responsibility is 10 years old.  A child under 10 cannot be charged with a criminal offence. For children aged 10 to under 14, there is a legal presumption known as doli incapax, which assumes the child is incapable of...

Why is it important to know who your client is?

In a range of contexts, it is important to know who your client is. In most professional service contexts, the identity of the client is the starting point to providing advice.  If it is not clear who the professional advisor is advising, this can cause issues as...

Mental Harm Damages Following Birth Trauma: Lessons from Sorbello

In South Western Sydney Local Health District v Sorbello [2024] NSWCA 14, the New South Wales Court of Appeal has provided timely guidance on two important issues in personal injury litigation: how courts choose between competing expert opinions on mental harm, and...

Damages for Defamation – Newman v Whittington [2025] NSWSC 275

A family dispute resolution practitioner was awarded $150,000 in aggravated damages, $10,000 in interest, and an injunction in a recent Supreme Court of New South Wales case. The defendant posted defamatory statements about the plaintiff on WordPress, Facebook, and...

Review Panel Determines Right Hand Injury as Non-Threshold Injury

The Personal Injury Commission (PIC) has ruled in Tasseli v Insurance Australia Limited t/as NRMA Insurance [2025] NSWPICMP 49 that damage to pre-existing surgical hardware constitutes a non-threshold injury, entitling the Claimant to ongoing statutory benefits and...

What are 5 legal requirements for a business?

When a new business is set up, there are various legal aspects which should be considered.  Some are more important than others in the early stages.  Obviously the nature of the business will dictate more specific legal requirements. We set out below some...

Court Dismisses Group Proceeding

A significant class action against Waller Legal Pty Ltd has been halted after the Supreme Court of Victoria ruled that the proceeding should no longer continue as a group proceeding. The case, Jane Jones (a pseudonym) v Waller Legal Pty Ltd [2025] VSC 42, involved...