The definition of “director” is found in section 9 of the Corporations Act 2001 and is defined to mean:
1) A person who is appointed to the position of a director or is appointed to the position of an alternate director and is acting in that capacity, regardless of the name that is given to their position; and
2) Unless the contrary intention appears, a person who is not validly appointed as a director if they acting in the position of a director, or the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes.
A director owes various statutory duties as follows:
1) Care and diligence (section 180 of the Corporations Act). A director or other officer of a corporation must exercise their 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.
2) Good faith (section 181 of the Corporations Act). A director or other officer of a corporation must exercise their powers and discharge their duties in good faith in the best interests of the corporation, and for a proper purpose.
3) Not to improperly use position (section 182 of the Corporations Act). A director, secretary, other officer or employee of a corporation must not improperly use their position to gain an advantage for themselves or someone else, or cause detriment to the corporation.
4) Not to improperly use information (section 183 of the Corporations Act). A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to gain an advantage for themselves or someone else, or cause detriment to the corporation.
Other duties of directors include:
1) Ensure that the company does not trade whilst insolvent (section 588G of the Corporations Act).
2) Keeping financial records (section 344 of the Corporations Act).
3) Disclosing directors’ interests (section 191 of the Corporations Act).
4) Information lodgement with the Australian Securities and Investments Commission (section 188 of the Corporations Act).
5) In relation to listed companies, continuous disclosure (section 674 of the Corporations Act).
For legal advice regarding your rights and responsibilities, please contact McAuley Lawyers on (02) 9633 1826 or email firstname.lastname@example.org
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