Programme Details - Module 1
Module 1: The Role of Directors: Duties, Responsibilities & Legal Obligations (3 days)
This module is designed for directors, senior executives or aspiring directors. The director plays a central role in companies. As a member of the board of directors, the director is responsible for the running of the company and wields almost exclusively the management powers of the company. Directors also face numerous obligations imposed on them by various legislative enactments and regulations as well as common law principles. This coupled by the multiple roles that they are called to undertake could translate into greater liabilities. The introduction of lead independent directors, for example, is one such role. It is also a common adage that the days of inactive boards are over. There are 6 sessions in this module, the coverage of each session is described in brief below.
I. Structure of the Board
- The division of power
- Shareholder litigation
- Shareholder ratification
- Residual powers of the general meeting.
II. Role of the Directors and their Relationship vis-à-vis Each Other
- Inter-relationship between the different directors
- Scope of roles and functions of the different types of directors, including executive, non-executive and independent.
- To what extent is a director an informed advisor to the board as a whole
- Building “Constructive Dissent”
- How much time is a director expected to spend in the company
- Encouraging preferred behaviors amongst different types of Directors
- Role of the various board committees
- How corporate governance principles fit into and impact upon the role of the Directors
III. Operations of the Board
- The capacity of the company
- Constitutional restraints on the exercise of corporate power
- How the board commits the company to juridical acts
- The role of agents
- Corporate governance measures, including appropriate checks and balances
IV. Directors Duties'
- The function of duties
- The different sources of duties:
- Fiduciary duties of Directors
- Statutory/regulatory duties of Directors
- Contractual duties of Directors
- Who is subject to these duties
- The director as a fiduciary
V. Directors' Duties
- The overriding duty to act in good faith for the benefit of the company as a whole
- The duty to exercise due care and diligence
- The fiduciary duties to avoid a conflict of interest and to profit from the directorship
- Application of duties to nominee directors and directors who sit on multiple boards
- The impact of a particular role of a Director on his duties
VI. Consequences of Breach
What happens if a director is found to be in breach of his obligations? General law as well as the Companies Act provide for a number of consequences, depending on the nature of the duty breached. In addition, there are mechanisms for the shareholders to ratify a breach of duty, as well as an exoneration power vested in the court to forgive a breach of duty. Directors may also be able to avail themselves of directors and officers policies.
