Australian laws dealing with company director’s duties are the most stringent on the planet. A breach of the Corporations Act 2001 can put company directors in trouble with the law. Failure to exercise their duties brings about conflicts among themselves and other shareholders or parties that are held by good faith and trust. Directors are responsible for the overall management of a company, and might need to defend a claim that they have neglect their fiduciary duties.
Director disputes in relation to their fiduciary duties can greatly affect the relationship between the company and its officers. Failing to act for the benefit of the entire company, directors stand to lose trust and good standing with shareholders, employees, creditors and the business community. Directors and fiduciary duties deputies arise among the directors of the company or between them and stakeholders. Disputes between stakeholders and directors result from neglect of operational or management roles. Generally, such conflicts are caused by a break of trust and confidence.
Some of the obligations imposed upon directors by the state and federal legislation include:
Work health and safety regulations
Environmental protection measures
Consumer protection strategies
Australian Stock Exchange Listing
Insolvent trading laws
As an officer of the company, a director is obliged to comply with the above statutory duties. At the same they are required to act with care and diligence when making business judgment.
Much is required from directors which should always align with the interest of the stakeholders. A director’s key general fiduciary duties and civil obligations include acting in care and diligence, proper purpose, best interest and good faith. A director ought to demonstrate proper use of position and information.
You will find it important to know that company directors may act collectively as a board, or individually as expected by the statutory and common law duties. For some reasons, a director may restrict access to the books, records and necessary information about the company. It is crucial that important information remain open to the public, shareholders and Australian company members or officers.
Our services are available to directors of public or proprietary companies that wish to understand and comply with their duties. As commercial lawyers you can contact us for guidance or assistance on:
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