Statutory Duties
The Companies Act 2014 outlines specific statutory duties for directors, providing a clear framework for their responsibilities, aligned with established common law and equitable principles. Directors must act in good faith for the benefit of the company, manage its affairs honestly and responsibly, and avoid conflicts between personal interests and their duties to the company.
Directors are required to act in compliance with the company’s constitution and must exercise their powers independently, unless the constitution or shareholders allow otherwise. They are also obligated to avoid misusing company assets or exploiting corporate opportunities for personal gain unless authorized by the company’s constitution or through shareholder approval.
Importantly, directors have a duty of care to act with the level of skill and diligence that a reasonable individual with similar knowledge and experience would apply. In cases of statutory breaches, directors may be required to indemnify the company for any resulting loss or may need to return profits gained from breaches of duty.
Courts have the authority to excuse directors from liability if they demonstrate they acted reasonably and in good faith. These statutory duties emphasise transparency, accountability, and prioritize the company’s best interests over individual gains.