Non-Executive Directors in Company Law


Added on  2023-06-06

5 Pages735 Words305 Views
Running head: COMPANY LAW
Company Law
Name of the Student
Name of the University
Author Note

Non-executive directors
A non-executive director is such a member of the board of director of the company who
is not a part of its executive team. They are involved in planning exercises and policymaking,
though they are not involved in the daily management of the corporation.
Qualification of Non-executive directors
There is no such specific qualification required for a candidate for non-executive director
role. They just have to be fit for the corporate governance of the company. They should have the
basic leadership, analytical and decision making skill.
Role of non-executive directors in the company they are appointed
As stated in the case of ASIC v Healey (2011) FCA 717 at 166; 172 non executive
directors have the same role as an executive director in regards to the governance of the
company, performance and recruitment of CEO, making strategic direction for the organization,
monitoring the risk factors in the organization, making contribution to the development of the
board and organization (Daoud, 2013). . Though, they may not have the same amount
operational knowledge about the organization as the executive directors.
Duties and responsibilities expected from the non-executive directors
Australian Securities and Investments Commission v Macdonald (No 11) NSWSC 287 is
a landmark case to decide the duties of non-executive directors (Melbourne University Law
Review, 2018). The non-executive directors are responsible for acting with care. They have a

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