Every director has legal obligations that they must carry out as part of their role. Being a director is a serious responsibility that carries weight and authority, and it’s also a role that directly influences the success of the business or organisation. These are three duties that all company directors must know and adhere to in order to be compliant in their role.
Exercising Reasonable Skill, Care, and Diligence
At one time, directors could be appointed purely on the basis of their reputation or name and without any significant expectation that they would carry out real duties as a member of the board. However, things have now changed and all directors must discharge their duties fully and with a clear degree of skill, diligence and care. A solicitor such as https://www.parachutelaw.co.uk/director-guarantee can assist with the legal ramifications of this requirement.
Keeping Records
Directors must also keep records in the form of meeting minutes at the board level. These minutes may be kept by a minute taker but they must be kept for ten years by law. These minutes will provide evidence of what the director said or did if they are ever challenged, and they can be incredibly useful tools by their very nature. This is very important in the carrying out of certain functions, such as the creation of a directors personal guarantee, to ensure that all relevant records and decisions are made and kept.
Conflicts of Interest
Directors must ensure that they have no conflicts of interest that will affect their role. These could be relationships that are of a personal or business nature, with any entity or person that is impacted by the activities of the company.
It might also describe a situation whereby the director is considering using information or an opportunity gained from their role to make a personal move to their own advantage.
A third area that can be an issue to the objectivity of a director is benefits or gifts. Directors must disclose any gifts that they receive.
These are just three of the main obligations and duties that company directors must carry out in their role to guide and steer the company to success. For these reasons and the senior nature of the role in question, directors are very carefully chosen by the board of a company and they will already have significant experience and skills within their professional careers.
