Flight of funds
QUESTION 1: Image you were a director of MTSB in 2006, what would be the steps you would taken to fulfill your fiduciary duties as a director.
The steps MTSB have taken to fulfill the fiduciary duties as a director according section 6 of Companies Act, fiduciary duties of a director.
Step 1 : Understanding about duties of director
To carry out your duties as a director well, it is necessary for you to be fully aware of the duties and responsibilities expected of directors. Directors are fiduciaries of the company which appoints them. A fiduciary is a person who is expected to act in the interests of another person.Hence, as a director, you have a duty to act in the way you honestly believe to be in the best interest and benefit of the company. The following are some duties of director :
To avoid conflict of interest
Under both common and statutory law, a director should not place himself in a position where the interests of the company come into conflict with his personal interest. It is therefore important for you as a director to be familiar with the common circumstances where conflicting interests may arise. It is also necessary for you to be aware of disclosure requirements applicable if you should find yourself in any of these circumstances.
To exercise care, skill and diligence
Under both the common law and statutory law, directors are expected to exercise reasonable care, skill and diligence in managing the company.Section 157 of the Act specifically emphasises that directors are required to act honestly and use reasonable diligence in carrying out their duties.The actual skill and experience an individual director possesses is often used as a yardstick to determine the standards that are expected of him. For instance, if a director possesses a higher degree of qualifications or skills, he will be judged by how he applies such knowledge and skills.
To not misuse power and information
a) To not misuse power
Directors have a duty not to misuse
The steps MTSB have taken to fulfill the fiduciary duties as a director according section 6 of Companies Act, fiduciary duties of a director.
Step 1 : Understanding about duties of director
To carry out your duties as a director well, it is necessary for you to be fully aware of the duties and responsibilities expected of directors. Directors are fiduciaries of the company which appoints them. A fiduciary is a person who is expected to act in the interests of another person.Hence, as a director, you have a duty to act in the way you honestly believe to be in the best interest and benefit of the company. The following are some duties of director :
To avoid conflict of interest
Under both common and statutory law, a director should not place himself in a position where the interests of the company come into conflict with his personal interest. It is therefore important for you as a director to be familiar with the common circumstances where conflicting interests may arise. It is also necessary for you to be aware of disclosure requirements applicable if you should find yourself in any of these circumstances.
To exercise care, skill and diligence
Under both the common law and statutory law, directors are expected to exercise reasonable care, skill and diligence in managing the company.Section 157 of the Act specifically emphasises that directors are required to act honestly and use reasonable diligence in carrying out their duties.The actual skill and experience an individual director possesses is often used as a yardstick to determine the standards that are expected of him. For instance, if a director possesses a higher degree of qualifications or skills, he will be judged by how he applies such knowledge and skills.
To not misuse power and information
a) To not misuse power
Directors have a duty not to misuse