Explain the Key provisions of Directors Duties in the Company’s act 2006
Introduction
- The CA 2006 enlists the details of a director’s duties.
- All directors must abide by the relevant provisions.
- S 170-178 deals with the main provisions of Director’s Duties.
- The remedies are provided for under S 178 CA 2006
- Among other remedies are equitable principles are resignation.
Who is a Director?
Section 250 CA 2006 states that “director” includes any person occupying the
position of director, by whatever name called.”
Role of the Board
First principle on Combined Code on Corporate Governance state:
“Every company should be headed by an effective board which is collectively
responsible for the success of the company”
DE JURE AND DE FACTO DIRECTORS
• De jure directors are the rightful (based on law) directors.
• De facto are not de jure directors but are (in fact) directors.
Re Kaytech [1999] B.C.C 390
The issue was whether the individual in question had assumed the
status and functions of a director so as to make himself responsible and
liable a director.
an individual who was not a de jure director was alleged to have exercised
real influence in the corporate governance of a company, that influence
might be concealed or open or something of a mixture as in this case.
Robert Walker J. held:
“On the primary facts found by the judge his conclusion that P was a de facto
director was inevitable and incontrovertible. P had helped incorporate the
, company and had been the moving spirit in giving instructions to an accountant
and others. He had pretended to raise the necessary capital. He had described
himself as a director on at least one important occasion and allowed himself to be
held out as joint founder and chief executive on another. P's appeal should be
dismissed.”
ALTERNATE AND NOMINEE DIRECTORS
Alternate directors stand in for a director who is absent for some reason.
Nominee directors are directors appointed by shareholders
EXECUTIVE/NON EXECUTIVE DIRECTORS
Executive directors usually work full time for the company under the terms
of a service contract. Non-executive directors are more commonly found in
larger companies
REMOVAL OF DIRECTORS
S.168 = a director can be removed by ordinary resolution of the shareholders at
any time.
Section 169
= provides the prescribed procedure to be followed for the dismissal of a
director.
= If you want to remove a director under s169, then a proper forum must be
given for him to explain himself
This applies notwithstanding anything contrary in any agreement between the
company and the directors
Special notice must be given of any resolution to remove a director.
Introduction
- The CA 2006 enlists the details of a director’s duties.
- All directors must abide by the relevant provisions.
- S 170-178 deals with the main provisions of Director’s Duties.
- The remedies are provided for under S 178 CA 2006
- Among other remedies are equitable principles are resignation.
Who is a Director?
Section 250 CA 2006 states that “director” includes any person occupying the
position of director, by whatever name called.”
Role of the Board
First principle on Combined Code on Corporate Governance state:
“Every company should be headed by an effective board which is collectively
responsible for the success of the company”
DE JURE AND DE FACTO DIRECTORS
• De jure directors are the rightful (based on law) directors.
• De facto are not de jure directors but are (in fact) directors.
Re Kaytech [1999] B.C.C 390
The issue was whether the individual in question had assumed the
status and functions of a director so as to make himself responsible and
liable a director.
an individual who was not a de jure director was alleged to have exercised
real influence in the corporate governance of a company, that influence
might be concealed or open or something of a mixture as in this case.
Robert Walker J. held:
“On the primary facts found by the judge his conclusion that P was a de facto
director was inevitable and incontrovertible. P had helped incorporate the
, company and had been the moving spirit in giving instructions to an accountant
and others. He had pretended to raise the necessary capital. He had described
himself as a director on at least one important occasion and allowed himself to be
held out as joint founder and chief executive on another. P's appeal should be
dismissed.”
ALTERNATE AND NOMINEE DIRECTORS
Alternate directors stand in for a director who is absent for some reason.
Nominee directors are directors appointed by shareholders
EXECUTIVE/NON EXECUTIVE DIRECTORS
Executive directors usually work full time for the company under the terms
of a service contract. Non-executive directors are more commonly found in
larger companies
REMOVAL OF DIRECTORS
S.168 = a director can be removed by ordinary resolution of the shareholders at
any time.
Section 169
= provides the prescribed procedure to be followed for the dismissal of a
director.
= If you want to remove a director under s169, then a proper forum must be
given for him to explain himself
This applies notwithstanding anything contrary in any agreement between the
company and the directors
Special notice must be given of any resolution to remove a director.
