When you are an employee of a company, the responsibilities relating to your role are usually made clear before you begin your employment, most likely by means of a contract of employment which will have been created by, or with the help of, a commercial lawyer at www.rowebristol.com.au. However, one role within a company where the responsibilities are often not as clear and specific is that of a company director.
If you think about it, with many job roles you could likely list several of the duties that they would perform, and for many, there is a clear career path with a clearly identified training and development. A couple of examples would be a company accountant and a sales manager.
Even if you do not anyone who has these jobs, nor done them yourself you could hazard an educated guess that the accountant has passed several accountancy exams and is highly skilled and experienced with regards to finance, business tax systems, and obviously how to produce accurate financial accounts.
For the sales manager, it is almost certain they were at one point a highly successful salesperson and went through plenty of coaching and training and then showed that they were capable of teaching and managing others to do likewise.
The point we are making is if you were to ask 100 people what the career path to becoming, and what were the responsibilities for lots of job roles, most of them could do so to with reasonable accuracy. However, if you were to ask the same 100 people those questions with regards to becoming a company director, we are sure the answers would vary enormously.
Ask yourself, ‘What is the usual career path and training required to become a company director, and further what are the responsibilities of a company director?’. That second part is actually the question most people find most difficult, with ‘run the company’, often being the generic answer many people give.
Obviously, ‘run the company ‘ is far too simplistic an answer, so to put some meat on the bones as it were, we are going to highlight some of the main legal responsibilities that a company deflector has.
Act Within Your Powers: This means that at all times you must work within any constitution of the company, and only ever exercise any powers which have been given to you for appropriate reasons.
Use Your Independent Judgement: This basically means that when making any decisions in relation to your role, you should not allow yourself to be unduly influenced and instead exercise your own judgement at all times.
Use Reasonable, Skill and Judgement: In effect, this is saying that you are expected to fulfil your role to the reasonable level which befits and would be normally be required of someone who is in the role of company director.
Facilitate The Success Of The Company: Any decisions you make as a director must be considered as to how it will promote the continued success of the company. From a legal standpoint, this means each decision must have regard to:
- The long term implications for the company
- The company employees
- The company’s network of customers, suppliers, and partners
- The community
- The environment
- The company’s reputation and good standing
- The fairness with respect to other directors and shareholders
Avoid Conflicts of Interest: You should ensure that you do nothing, nor create a situation which would create a conflict of interest for you. Examples are having multiple company directorships or having a financial interest, such as shares, in a competitor.