Impose a duty on directors, Business Law and Ethics

Impose a duty on directors:

A company is, however, free to impose a duty on its directors to attend board meetings within a certain period of time and to prescribe the consequences of a breach of the duty. See, for example, Table A, Article 88(f).

In respect of all duties which having regard to the exigencies of business so, and the articles of association there may properly be left to several other official, a director is, in the absence of grounds for suspicion, warranted in trusting that official to perform such duties honestly.

Whether a director is to be made liable then it can only be on the basis of his personal negligence, and it is not negligence to delegate some responsibilities to officials or employees of the company whose previous conduct has given no grounds for distrust or suspicion.

In DOVEY v CORY a director was held not liable for negligence merely because he had failed to verify false information regarding the company's accounts which he had been given by the company's manager and managing director. The court stated:

"Business cannot be carried on upon principles of distrust. Men in responsible positions must be trusted by those above them, with those below them there through until there is reason to distrust them. Because we agree that care and prudence do not involve distrust."

Posted Date: 1/12/2013 4:54:57 AM | Location : United States







Related Discussions:- Impose a duty on directors, Assignment Help, Ask Question on Impose a duty on directors, Get Answer, Expert's Help, Impose a duty on directors Discussions

Write discussion on Impose a duty on directors
Your posts are moderated
Related Questions
Explain International law on sir creek issue The issue concerning Sir Creek is of great importance for both India and Pakistan. The dispute does not concern the division betwee

Extraordinary Universal Meetings: S.132(1) provides for the convening of "extraordinary" general meeting but does not define it.  Neither is the word "extraordinary" defined i

Creditors meeting - winding up: The creditors' meeting is convened for the same day at a later time than the members' meeting or it is held the following day.  One of the dire

Sources of US Law of Contract However the Law of Contract Act 1961, S. 2(2) provides like, except as may be provided through any written law to the time being in force, hence

I. Sammy has been under continuous employment with World Entertainment Ltd for 5 years. Last Friday Sammy was called to the Director's Office and verbally informed that h

Variation of class rights of the preference shareholders: This was not a variation of class rights of the preference shareholders.  The company could resolve to go keen on liq

Question 1: "Constructive Dismissal is inherently different from dismissal in the sense that it is the employee who necessarily takes the initiative in considering the contrac

Reaction of Other Countries - Policy coordination  A final problem associated with the policy coordination is that countries not involved in the policy agreement may react in s

Registers and documents - registered office: The following registers and documents are also kept at the company's registered office:- i.             The register of members

State the International Policy Coordination There may be two sources of interdependence between national economic policies, club goods and horizontal spill overs. The first has