In view of the coronavirus pandemic, we are making LIVE CLASSES and VIDEO CLASSES completely FREE to prevent interruption in studies
Elements of Company Law - II

Duties of Directors

The duties of directors and the Board are primarily responsible for leading the organisation on behalf of the stakeholders. As well as they are responsible for ensuring the legal entity of the company. It means that the company must remain viable and properly functioning in the present and the future as well. Under the common law, directors have to be honest, exercise delicacy and skill when dealing with company issues, while working on behalf of the company.

Suggested Video

Play
Play
Play
Arrow
Arrow
ArrowArrow
Importance of Directing
Introduction of Business Laws
Introduction of Companies Act 2013
Slider

 

Duties of Directors

  • Deciding the company’s future goals and priorities.
  • Communicating with the stakeholders to inform them of the company’s growth and ensuring their input plays a part in the company’s future.
  • Checking the external market conditions to ensure that the company is headed in the right direction.
  • Monitoring the performance of employees and encouraging them to achieve their targets is one of the primary duties of directors.
  • Setting the budget for the company’s operations and keeping tabs on the profit and loss margin.
  • Reporting back to the stakeholders at the Annual General Meeting (AGM).
  • Establishing rules and regulations and forming policies that everyone in the company would follow.
  • Making sure the organisation has a good system of governance and that there is no gap in communication.
  • Being in an advisory capacity to the CEO.
  • Doing effective risk management assessment

Duties of Directors

Code of Conduct

  • To not use company information for personal gain or insider training.
  • To not take advantage of the power of their authority.
  • Avoid conflict of interest between personal interests and the company.
  • To maintain the reputation of the organisation and not do anything that could dishonour the company.
  • To diligently follow the lead and orders of the Chief Executive Officer of the company and not go against him.
  • Attend all board meetings and give useful insights and ideas.
  • Respect the authority of fellow colleagues.
  • To have a debate in a logical, calm-headed manner and come to conclusion with the approval of the majority.
  • Maintain confidentiality about important company information. Not to leak it to the press or competition which will be detrimental to the company’s growth.
  • To accept the decisions once they have been passed.
  • Act in an honest, professional and respectful manner with members of the board and employees of the company.
  • Recognise that all is his actions must lead to proper growth and development of the company.
  • Perform the duties assigned to them without fail.

Code of conduct is an effective tool to define the things expected from the directors and to make them understand which behaviour is appropriate and which behaviour is not.

Learn more about the Role of Secretary in Company here in detail.

Solved Question for you

Question: Mention any five duties of directors.

Answer – Duties of the board are as follows –

  1. Communicating with the stakeholders to inform them of the company’s growth and ensuring their input plays a part in the company’s future.
  2. Checking the external market conditions to ensure that the company is headed in the right direction.
  3. Monitoring the performance of employees and encouraging them to achieve their targets is one of the primary duties of directors.
  4. Setting the budget for the company’s operations and keeping tabs on the profit and loss margin.
  5. Reporting back to the stakeholders at the Annual General Meeting (AGM).
Share with friends

Customize your course in 30 seconds

Which class are you in?
5th
6th
7th
8th
9th
10th
11th
12th
Get ready for all-new Live Classes!
Now learn Live with India's best teachers. Join courses with the best schedule and enjoy fun and interactive classes.
tutor
tutor
Ashhar Firdausi
IIT Roorkee
Biology
tutor
tutor
Dr. Nazma Shaik
VTU
Chemistry
tutor
tutor
Gaurav Tiwari
APJAKTU
Physics
Get Started

Leave a Reply

avatar
  Subscribe  
Notify of

Stuck with a

Question Mark?

Have a doubt at 3 am? Our experts are available 24x7. Connect with a tutor instantly and get your concepts cleared in less than 3 steps.
toppr Code

chance to win a

study tour
to ISRO

Download the App

Watch lectures, practise questions and take tests on the go.

Get Question Papers of Last 10 Years

Which class are you in?
No thanks.