This document defines key terms related to directors' duties and discusses various duties of directors under common law, statutory law, and PRC law. It outlines duties of care and skill, fiduciary duties, conflicts of interest, duty to act in the company's interests, and more. It also discusses shadow directors, de facto directors, and nominee directors. The duties apply differently to executive vs non-executive directors. Breach of duties can lead to civil liability. PRC law also establishes directors' duties to the state and various stakeholders.
This presentation explains about the legal position of directors.
Directors are the persons duly appointed by the company to direct and manage the affairs of the company.
Their legal position is sometimes described as agents, sometimes as managing partners, and sometimes as trustees.
The board of directors plays a central role in the corporate governance system. All countries require that publicly listed companies have a board. While their attributes vary across nations, they universally share common responsibilities.
This Quick Guide provides an introduction to the roles and responsibilities of the board of directors.
It answers the questions:
• What is the purpose of a board?
• How does a board function?
• What does it mean to be “independent”?
• What are the legal and fiduciary requirements?
For an expanded discussion, see Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences (Second Edition) by David Larcker and Brian Tayan (2015): http://www.gsb.stanford.edu/faculty-research/books/corporate-governance-matters-closer-look-organizational-choices
Buy This Book: http://www.ftpress.com/store/corporate-governance-matters-a-closer-look-at-organizational-9780134031569
For permissions to use this material, please contact: E: corpgovernance@gsb.stanford.edu
Copyright 2015 by David F. Larcker and Brian Tayan. All rights reserved.
This presentation explains about the legal position of directors.
Directors are the persons duly appointed by the company to direct and manage the affairs of the company.
Their legal position is sometimes described as agents, sometimes as managing partners, and sometimes as trustees.
The board of directors plays a central role in the corporate governance system. All countries require that publicly listed companies have a board. While their attributes vary across nations, they universally share common responsibilities.
This Quick Guide provides an introduction to the roles and responsibilities of the board of directors.
It answers the questions:
• What is the purpose of a board?
• How does a board function?
• What does it mean to be “independent”?
• What are the legal and fiduciary requirements?
For an expanded discussion, see Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences (Second Edition) by David Larcker and Brian Tayan (2015): http://www.gsb.stanford.edu/faculty-research/books/corporate-governance-matters-closer-look-organizational-choices
Buy This Book: http://www.ftpress.com/store/corporate-governance-matters-a-closer-look-at-organizational-9780134031569
For permissions to use this material, please contact: E: corpgovernance@gsb.stanford.edu
Copyright 2015 by David F. Larcker and Brian Tayan. All rights reserved.
Independent directors are Hardly IndependentPuneet_Piyush
The presentation discusses, in context of India..how the spirit of legislations on Independent directors is blatantly violated while obeying the law in words.
Presentation on Independent Director as per Companies Act 2013Vishal Dhona, ACS
Presentation is made for understanding what is independent director? what are its roles?
Also by means of this you can understand what are the various provisions applicable to independent director.
The Companies Act 2013 has introduced significant changes in the composition of the board of directors of a company. This White Paper contains the description of some provisions related to Independent Directors which have been modified in Companies Act 2013.
The Companies Act, 1956 (referred as "the Act, 1956") do not directly talks about ID's, as no such provision exists regarding the compulsory appointment of ID's on the Board. However, Clause 492 of the listing agreement which is applicable on all listed companies mandates the appointment of ID's on the Board.
Independent directors are Hardly IndependentPuneet_Piyush
The presentation discusses, in context of India..how the spirit of legislations on Independent directors is blatantly violated while obeying the law in words.
Presentation on Independent Director as per Companies Act 2013Vishal Dhona, ACS
Presentation is made for understanding what is independent director? what are its roles?
Also by means of this you can understand what are the various provisions applicable to independent director.
The Companies Act 2013 has introduced significant changes in the composition of the board of directors of a company. This White Paper contains the description of some provisions related to Independent Directors which have been modified in Companies Act 2013.
The Companies Act, 1956 (referred as "the Act, 1956") do not directly talks about ID's, as no such provision exists regarding the compulsory appointment of ID's on the Board. However, Clause 492 of the listing agreement which is applicable on all listed companies mandates the appointment of ID's on the Board.
Claims and Related Issues Arising out of Bankruptcy or ReceivershipPolsinelli PC
The sixth webinar presentation in the M&A Litigation Series examines claims and other issues arising out of bankruptcy, receivership, or assignments for the benefit of creditors. Rights of creditors when the enterprise is in the “zone of insolvency” are discussed. Section 363 asset sales and the acquisition of assets out of receiverships or assignments also are addressed.
On our agenda:
-Zone of Insolvency: Creditors’ Standing as Ultimate Beneficiaries of Residual Estate
-Fiduciary Duties of Boards of Directors
-Business Judgment Rule and Related Standards of Review of Corporate Conduct
-Acquiring Assets out of a Bankruptcy via 363 Sales and out of Receiverships and Assignments
Describe the relationship between a corporation’s common stockholder.pdfakukukkusarees
Describe the relatinship between different quadrilateralsin this hierarcy. Explain your answer.
a. What is the relationships between a (1) quadrilateral, (2) kite, (3) rhombus, and (4) square? is a
square a rhombus, is a rhombus a kite, is a kite a quadrilateral? Explain.
b. What is the relationship between a (1) quaddrilateral, (2) trapezoid, (3) isoscles trapezoid, (4)
rectangle, and (5) square? Is a square a rectangle, is a rectangle an isosceles trapezoid, is an
isosceles trapezoid a trapezoid, is a trapezoid a quadrilateral? Explain.
c. How do parellelograms fit into the mix?
Solution
a.
It depends on how exactly you definite a \"kite\". Formally speaking, your teacher is wrong. A
kite is typically defined as a planar, convex quadrilateral where two adjacent sides are of the
same length as each other (\"a\"), and the other two adjacent sides are of the same length as each
other (\"b\"):
http://mathworld.wolfram.com/Kite.html
So in this sense, a rhombus is a type of kite (where a=b), and a square is a type of kite too
(where a=b, and there\'s a 90 degree angle).
I\'m guessing that your teacher is redefining \"kite\" to be such a shape where \'a\' and \'b\' are
strictly NOT equal to each other, or some equivalent of that. In that case, your teacher is correct.
But this confusion is why it\'s important to have formal definitions in mathematics.
2.
1) THREE QUADRILATERALS: Square...Rectangle..trapezoid...Rhombus
2) PROPERTIES OF PARALLELOGRAM:
- All sides across from each other are parallel
- Diagonals bisect each other
- opposite sides are congruent
- opposite angles are congruent
3)TWO METHODS THAT PROVE IT IS A P.GRAM:
-If pairs of opposite sides are congruent
- if consecutive angles are supplementary
4) DIFFERENCE BETWEEN TRAPEZOID AND ISOSCELES TRAPEZOID:
- Trapezoid has one pair of parallel sides and one pair of congruent sides
- Isosceles Trapezoid also has a pair of parallel sides but the other pair of sides are not congruent
5)KINDS OF ANGLES THAT ARE FORMED BY DIAGONALS OF A..
- Kite
-Diagonals are perpendicular
-Square
-diagonals are perpendicular
-Rhombus
-diagonals are perpendicular
3..
Responsibilities of Directors Workshop presented by Peter Stewart & Professor...Coleman Greig Lawyers
Presented by internationally recognised specialist in corporations law, Professor Michael Adams and Coleman Greig's Principal Peter Stewart, they covered the key responsibilities of Directors in the recent workshop hosted at Coleman Greig Parramatta.
Corporate collapses, misinformation, fraud and the failure of many watchdog institutions, from auditors to investment analysts, have driven the need for change beyond the self-policing business arena and into the realm of politics - as had happened to Enron and Worldcom - as well as lesser corporate debacles, such as Adelphia Communications, AOL, Arthur Andersen, Global Crossing, Tyco, created an atmosphere of doubt and among the investing public. Practical applications of corporate governance in the US now mean compliance with the law - not just compliance with a "softly" enforceable voluntary code.
Fiduciary Duties Owed by Boards of Directors to Both Solvent and Insolvent Co...Polsinelli PC
This webinar will focus on fiduciary duties owed by a board of directors to a company not only when the company is healthy, but also as the company heads towards insolvency. The panel will also discuss the current state of the zone of insolvency. The focus will be on Delaware corporations, but the panel will contrast how other jurisdictions address fiduciary duties, zone of insolvency, and deepening insolvency.
On the agenda:
-Summary of Fiduciary Duties of a Board of Directors
-Applicable Standards of Review for Transactions Under Delaware Law
-The Origins of the Zone of Insolvency
-Current Status of the Zone of Insolvency
-Other Jurisdictions View on Fiduciary Duties, Zone of Insolvency, and Deepening Insolvency
The law imposes a high standard of conduct on directors and officers. If a director or officer falls below this standard, they may face personal liability. This presentation will provide an overview of the duties and liabilities faced by a company’s Board, including strategies for avoiding the pitfalls associated with acting as a director or officer.
3. SHADOW DIRECTORS
影子董事
• A person in accordance with whose directions
or instructions the directors of the company
are accustomed to act.
• (S 251 of the 2006 Act). 6.3
• Statutory creation. Can be corporate director
• Influence a governing majority and does not
have to be the life of the company.
• Judicial definition by Morrit LJ. 6.3
4. DE FACTO DIRECTORS
事实董事
• Assume the role and status of a director.
• Judicial definition: Company held him to be a
director.
• Or he himself places himself on equal footing
with other directors.
• Undertook functions of a company director
and not just management duties.
• Judicial definition and judicial test. 6.7
5. Nominee directors
代名董事
• Definition – a commercial term, may consider
the interest of his appointer and must not
conflict with the interest of the company.
• Duties of a nominee director – judicial outline
by Warren J in Re Southern Counties Fresh
Foods Ltd. 6.14
6. APPOINTMENT & RESIGNATION
任命和辞职
Responsible for the management powers and this
will be provided in the articles.
Private companies: at least one. Public: at least
two. A company must have at least one natural
person as a director.
He can resign anytime. May be a breach of
contract. He cannot appropriate the assets of the
company such as a maturing business
opportunities, property or business or
confidential information. Can compete.
7. DUTY OF CARE & SKILL AT COMMON LAW
普通法上的尽职义务
Not liable for errors of judgment.
• Not to exercise higher performance of his
duties based on his level of knowledge &
experience.
• Not bound to give continuous attention to the
affairs of the company.
• Can delegate duties to employees and officers.
• (Re City Equitable Fire Insurance Co Ltd)6.23
8. DUTY OF CARE & SKILL – STATUTORY
成文法上的尽职义务
• Objective test: the general knowledge, skill &
experience reasonably expected of a director.
• Subjective test: the general knowledge, skill
and experience that the director has.
• Executive director – reasonably expected of
him, e.g. finance director. Non executive
director is not expected to give full time to the
company.
• (S 174 of the Companies Act 2006).6.28
9. FIDUCIARY DUTIES AT COMMON LAW
普通法上的受信义务
• No conflict rule – no profit rule. First, cannot
be swayed by personal interest. Second,
accountable for any profit or gain obtained as
a result of fiduciary position. 6.36
• Duties owe to the company and not to
shareholders individually or collectively.
• Cannot enter into transactions which conflict
with the company. Best interests of the
company and cannot favour close relations.
10. FIDUCIARY DUTIES AT COMMON LAW
普通法上的受信义务
• With shareholders’ consent, he can retain
profits.
• Non disclosure of the conflict is in itself a
breach regardless of whether there is
exploitation by the director.
• Presence of good faith and in the interest of
the company.
11. STATUTORY FIDUCIARY DUTIES:
GENERAL DUTIES
成文法中的受信义务:一般义务
• Owed duty only to the company.
• Loss for breach must be company’s loss and
recovery will be for the company.
• An ex director is prohibited from exploiting for
his benefit “any property, information or
opportunity of which he became aware of at a
time when he was a director.
• S 171 to 177 of the Companies Act 2006
12. DUTY TO ACT WITHIN POWERS
仅在权限内行为的义务
• Act in accordance with the constitution.
• Exercise powers for the purposes for which
they are conferred.
• Good faith is not a defence.
• Shareholder’s remedy: derivative action to
oblige a director to observe constitution.
• S.171 of the Companies Act 2006.
13. DUTY TO PROMOTE THE SUCCESS OF
THE COMPANY
致力于公司成功的义务
• S 172 (1) of the Companies Act 2006.
• Inclusive manner. Success of the company will benefit
members. Success replaces best interests of the
company. Success means long-term shareholder’s
value.
• Due recognition to the interests of others (employees,
customers, suppliers and the community.
• High standard of business conduct.
• Act fairly between members of the company.
• S 175 (2). 6.51
14. DUTY TO AVOID CONFLICT OF INTERESTS
避免利益冲突的义务
• Direct or indirect interest that conflict or may
conflict with the interests of the company.
• A person cannot be a director of 2 companies
competing with one another.
• Exploitation of property, information or
opportunity which gives rise to conflict of
interests. Excludes those which a director has
no duty to pass to the company.
15. DUTY NOT TO ACCEPT BENEFITS FROM
THIRD PARTIES
不得从第三方获取利益的义务
• Third parties include associate companies, persons
other than the company and individuals acting for the
company.
• Benefit must be by reason of being a director
• Benefits include pecuniary and non pecuniary benefits.
Include indemnity given to a company to act as a
director of another company. There must be a conflict
of interest and not de minimis in nature. Does not
include director’s own company for providing services
to the company and the director receives
remuneration.
• S 176 (1) of the Companies Act 2006 6.62
16. DUTY TO EXERCISE INDEPENDENT
JUDGMENT (S 173(1)
独立判断的义务 (S 173(1)
• Excercise judgment in the interests of the
company and not to abdicate this duty by acting
on the instructions of third party or another
director.
• For example, the directors may have to agree to a
restructuring of the company with issuance of
shares to a designated party and allotment to be
done in a particular manner.
• Constitution can provide the need for
independent judgment for a nominee director.
17. DUTY TO EXERCISE REASONABLE CARE,
SKILL & DILIGENCE (S 174)
合理尽职及谨慎义务(S 174)
• Expected of a person carrying out the function
carried out by the director in relation to the
company. Objective test.
• The general knowledge, skill and experience that
the director has. Subjective test. For example,
the special skills of directors, an accountant, a
lawyer or CFA etc.
• Reflects common law except there is a need for
carrying on of such a duty continuously. 6.70
18. CIVIL CONSEQUENCES FOR BREACH OF
GENERAL DUTIES
违反一般义务的民事后果
• Consequences and civil liabilities: governed by
common law or equitable principles.
• Covers issues of substantive remedy (for e.g
rescission, accounting for profits etc) and
causation and foreseeability.
• Enforcement: same as for breach of fiduciary
duty.
• S 178 (1) and (2). 6.75
19. PRC Law – DEFINITIONS & DUTIES OF DIRECTORS
中国法 – 董事的定义和义务
• No inclusive definition.
• Duties to company owed by directors, supervisers
and senior managers. Duties include loyalty and
diligence.
• See art 148 of the PRC Company Law 2005.
• Duties owe to the State, employees, shareholders,
creditors and the community.
• There should be corporate social responsibility,
interests of the community or environment. Art 5
and art 17 of the PRC Company Law 2005.
20. CSRC GUIDANCE FOR LISTED COMPANIES 2006
证监会关于上市公司的指引 2006
• Due diligence in compliance with articles of
association, law and administrative regulations.
• Care, caution and diligence in ensuring company’s
business activities are in compliance with the law,
administrative regulations and other state economic
policies and its licence does not exceed its scope.
• Treat all shareholders impartially.
• Article 98. Test: Objective.
21. PRC Law: DIRECTORS’ AVOIDANCE OF
CONFLICT OF INTERESTS
中国法:董事对利益冲突的避免
• Misappropriating company’s funds.
• Using company’s funds or assets to provide guarantee or
entering into a contract in violation of the articles.
• Seeking business opportunites for himself or operating a
business in direct competition with the company.
• Keep commissions arising from transactions between the
company and others.
• Illegal disclosure of company’s secrets.
• No provision for ratification by shareholders’ meeting.
• Art 149 of the Company Law 2005.
• Art 125 does provide for decision at board of directors’
meeting and shareholders meeting but only for listed
companies.
22. CSRC GUIDANCE FOR LISTED COMPANIES 2006
证监会关于上市公司指引 2006
• Provision for avoidance of bribes or other illegal
gains or encroach on the property of the company.
• Provides for “consent of shareholders’ meeting” in
relation to business opportunities.
• Provides for any financial gain of the director to be
for account of the company plus compensation for
causing any damage to the company.
• Art 97.
23. PRC Law: CESSATION OF OFFICE
中国法:任职的终止
• No provision for liabilities after cessation of
office of directorship under Company law.
• Make references to Labour Contract law in
relation to secret profits, intellectual property
and non competition. See articles 23 and 24.
• Art 101 of the CSRC’s Guildance does make
provision for continuance of duties as
stipulated in the articles of association of
listed companies.