In practice, there is a distinction between the duties performed by the board of directors as a whole and the duties of the management. The board of directors plays a supervisory role rather than manages or gives direction to the company. It is the management that runs the operations of the company.
A director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office. He shall not make improper use of any information acquired by virtue of his position as director, officer or agent of the company to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the company. This means the director has the duty to always;
- act within powers;
- promote the success of the company;
- exercise independent judgment;
- exercise reasonable care, skill and diligence;
- avoid conflicts of interests;
- accept benefits from third parties;
- declare interests in proposed transaction or arrangement
You cannot be appointed as an “inactive director”, “nominee director” or “sleeping director” and not be held responsible for any offenses. Under the Companies Act, the law does not distinguish between “active” and “sleeping” directors.
