Directors Of A Company Are Under Statutory Obligation To Exercise Reasonable Duty Of Care, Skill And Diligence At Work

1079 words - 5 pages

Duties of Director:

The duties of directors of a company have been elaborately explained by Romer L. J in Re City Equitable Fire Insurance Co[1]. The important duties are quoted from this case and summarized below:

1. Distribution of work:

The manner in which the work of a company is to be distributed between the board of directors and the staff is a business matter to be decided on business lines.

2. Good faith:

Every director must act honestly and in the interest of the company.

3. Reasonable care:

A director “must exercise such degree of skill and diligence as would amount to the reasonable care which an ordinary man might be expected to take in the circumstances on his own ...view middle of the document...

7. Other duties:

In addition to the duties mentioned above every director have the following duties:
1) A director has to send to the registrar stating his consent to the post of director. –Sections 266. (2) Every director must obtain the qualification, share of directorship according to the article of the company.—Section 270. (3) Every director must pay his share monies according to the ‘Call’ of the Board of directors. (4) A director must not participate in the meeting of the Board of directors, when they decided his contract with the company.

Skills of Director:

For the development and success of the company - Directors are long-term thinkers. Average thinkers think only about the present, and about immediate gratification. But skills of directors think about where they want to be in five and ten years, and what they have to do each hour of each day to make their desired future a reality.

1. Directors inspire others because they are inspired themselves:
They are excited about the possibility of creating an exciting future for themselves. They get up every morning and they see every effort they make as part of a great plan to accomplish something wonderful with their lives.

2. Directors are optimistic:
They see opportunities in everything that happens, positive or negative. They look for the good in every situation and in every person. They seek the valuable lessons contained in every problem or setback. They never experience "failures;" instead, they write them off as "learning experiences."
3. Directors have a sense of meaning and purpose in each area of their lives:
They have clear, written goals and plans they work on every day. Directors are clear about where they are going and what they will have to do to get there. Their behavior is purposeful and goal-directed. As a result, they accomplish five and ten times as much as the average person who operates from day to day with little concern about the future.

4. Directors accept personal responsibility:
Directors never complain, never explain. Instead of making excuses, they make progress. Whenever they have a set-back or difficulty, they repeat to themselves, "I am responsible! I am responsible! I am responsible!"
5. Directors see themselves as...

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