Director Duties Avoid Conflicts

Director Duties Avoid
Conflicts

Table of Contents
INTRODUCTION...........................................................................................................................1
Duties of a director of a company................................................................................................1
Duty to avoid conflicts of interest (Section 175 of company act 2006)......................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
A director in the context of avoid conflicts of interest is someone who occupies a position
of trust and is responsible for avoiding situations of conflicts interest with the company
(ANDREW. KEAY, 2016). this study will show some roles of director of the company that
protects the company against lawsuits.
Duties of a director of a company
As per the companies act 2006 section 175 the main duty of directors is to avoid conflicts
of interest. As per this law and amendment in 2008, a director of an organization Wil have a
statutory duty under section 175. To solve all those conflicts and situations in which he/she has
and can have a direct or may be indirect interest that conflicts arise with the interests of the
company. The main duties which are needed to perform by directors of the company is to
determine as well as implement policies and making effective decision. They are also responsible
for preparing as well as filing statutory documents within the company office. Some common
roles of a director of a company under companies act 2006 is described as follows:
Act within power: Director needs to act with the company's constitution with the main aim of
using power for the main purpose which are being given to the director (Taylor and Kong,
2019).
Promote the success: It is also important for the director to act in good faith as they are
responsible for the success of the company. There are some factors which need to be focused
while considering that what is the most likely to promote the success of the company such as:
need to foster an organisation's business relationship with customers and suppliers, to maintain
the company's reputation, to focus on needs of employees of the company etc.
Exercise independent judgement: Exercising independent judgement is other roles for making
efficient decisions but it does not prevent him from acting accordance with the company's
agreement.
Exercise reasonable skills: Director needs to show the same skills and care as like diligent
person. It includes general knowledge of managing company's operations and experience of
performing relevant functions.
In exception, it is also stated that director's basic and actual understanding is not enough
if there is an expectations more from reasonable person of someone in her/his position.
1