The phrase “Fiduciary Duties of a Director” is used so often but I still meet some Directors who feel inhibited to ask just what does the phrase mean.
Fiduciary Duties are set out in the Companies Act 2014 and are intended to help a Director comply with his/her duties as a Director.
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Duty to disclose any interest Director may have in contracts made by the company.
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Act in good faith in interests of the company.
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Act in accordance with the Company’s Constitution. Although not stated in the Companies Act 2014 a Director would also have to act in accordance with Shareholder’s Agreement if applicable.
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Only act in accordance with the law.
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Do not use the company’s property, information or opportunities for his/her own benefit or that of anyone else without specific approval as set out in the Act.
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Cannot restrict a Director’s power to exercise his/her independent judgement without specific approval or permission as set out in the Act.
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Avoid conflict between the Director’s duties to the company and his/her own personal interests.
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Exercise care, skill and diligence.
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Have regard for the interests of its employees in general and the interests of the members.
Fiduciary Duties may sound onerous but, they are a key resource in helping us as Directors to focus on our duties and responsibilities to act in the best interests of the company, its members and employees. For me, Fiduciary Duties are just common sense and should help all Directors to manage an effective and progressive company.