6_Lecture 6.pptx - TLAW 402(Week 6 Directors Duties(Part 1...

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
TLAW 402 (Week 6) Directors Duties (Part 1) Fiduciary duty (to act in good proper purpose; and to avoid interest) TLAW 402 (Week 6 Directors Duties Part 1)AH faith; and for conflicts of 1
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
(We e k 6 : Duti e s of Dir e c t ors) Discuss directors [both content; application of fiduciary duties general law a n d under the Corporations Act ] Discuss consequences of breach [both general law a n d under the Corporations Act ] Read Ch 15-16 of Australian Corporate (Harris, Hargovan & Adams 5 th ed , 2016 ) Law TLAW 402 (Week 6 Directors Duties Part 1)AH 2
Image of page 2
TLAW 402 (Week 6 Directors 3 Duties Part 1)AH Function of Directors Duties
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Function of Directors Duties Function Protect shareholders from risk or its property of harm to co Make directors accountable for harm or mismanagement Maintain loyalty and trust Definition (s 9) includes “de facto” and “shadow” directors TLAW 402 (Week 6 Directors Duties Part 1)AH 4
Image of page 4
Over v iew of d i rec t ors duties At General law : Directors owe fiduciary duties (duties of loyalty, honestly and trust) to the co; as fiduciaries, directors must 1. 2. 3. 4. At 1. Act in good faith in the interests of Use powers for a proper purpose Avoid conflicts of interest Retain discretion Common law: directors must Exercise care, skill and diligence the co Note: duties above are reinforced under 183 of Corporations Act . ss 180- TLAW 402 (Week 6 Directors Duties Part 1)AH 5
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Directors duties: Corporations Act Sections 180 : duty to exercise care and diligence S S S 181 : 181 : 182 : to act honestly to use powers for proper purpose not to make improper use of his or her position [no conflict rule] S 183 : not to make improper use of conflict rule] information [no – Breach of these duties are a civil 1317E) penalty (s – Breach can also result in criminal offence (s 184) - except for breach of duty of care and diligence) TLAW 402 (Week 6 Directors Duties Part 1)AH 6
Image of page 6
A: Gener a l l aw duties (i) to act in good faith in the interests of the company- What is the scope/ambit of this duty? Does this duty include considering the interests of shareholders, creditors, employees and society? Brunninghausen Percival v Wright ; Coleman v Myers ; v Glavanics ; Walker v Wimborne; Kinsela v Russell Kinsela; Spies v R; Parkes v Daily News Read Ch 15 of Australian Corporate Law (Harris, Hargovan & Adams 5 th ed , 2016 ) at pp 419-425 TLAW 402 (Week 6 Directors Duties Part 1)AH 7
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
To whom are directors duties owed? General rule is that directors owe a duty to the members of the co as a whole: but note exceptions arising when: – individual members ( Glavanic case) in a closely held pty co – Note limited exception: creditor interests when the co is insolvent or in financial difficulties ( Russell Kinsela case; Spies case) TLAW 402 (Week 6 Directors Duties Part 1)AH 8
Image of page 8
Individual Shareholders?: Glavanic case Ordinarily, no – but note exception ( Glavanic case) .
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern