1. Chapter 10 Directors and Officers
Corporate Governance

2. Types of Director Independent or non-executive directors
Not involved in day-to-day management
Executive directors
Responsible for daily operations
Alternative directors
Temporary directors, with no legal status
Nominee directors
Represent the interests of particular stakeholders, such as creditors.

3. Restrictions To be a director, four conditions must be satisfied:
Consent to the appointment in writing.
Be an individual.
Be at least 18 years old.
Not be disqualified from being a director.
A proprietary company must have one at least one Australian director. A public company requires at least three directors.

4. Appointment and Removal
A director is defined as:
A person appointed to position as a director or alternative director.
A person not validly appointed (a de facto director).
A shadow director.
Removal
Shareholders may vote a director off of the board at a general meeting.

5. Fiduciary Position
Directors must act in the interests of the company. This is the Fiduciary Relationship. A director may not benefit from their position at the expense of the company.

6. Powers and Functions Power of Management:
The general rule is that the decision-making powers of directors extend to any matters not granted to the members or otherwise restricted by the replaceable rules or constitution.
The power of management is also bestowed upon:
A person who makes decisions that affect a substantial part of the organisation
A person who may affect the company’s financial standing
A receiver of manager of property of the company
A trustee involved with the company.

7. Directors’ Meetings
The Corporations Act sets out rules dealing with the conduct of meetings, including:
The requirement to keep minutes of proceedings and resolutions.
That they be called or conducted using any technology consented to by all the directors.

8. Calling a Directors’ Meeting
Usually dictated by the constitution. The replaceable rules provide that any director may call a board meeting. A period of notice for meetings is usually contained within a constitution. Quorum requirements stipulate that a minimum number of directors must attend.

9. Making Decisions
Usually made by majority vote with each director receiving a vote. The constitution may vary the number of allocated votes. Informal Decisions Constitutions usually allow directors to ‘vote sign’ on a resolution without a physical meeting.

10. Delegation
Unless the constitution states otherwise, a company may delegate any of their powers to any person.
Day to day management is usually delegated to a CEO or managing director.

11. Responsibility for Actions of Delegates
Each director is responsible for the actions of a delegate. The director is immune to responsibility if they believed that: The delegate would exercise power responsibly and within the duties imposed upon directors.

12. Rights to Information
Directors have a right to company information to allow them to undertake their tasks efficiently, including:
A statutory right to access financial records.
A common law right to access broader company information.
A right to inspect the books of the company.

13. Company Secretaries
A company secretary is the administrative officer of the company and has the following responsibilities:
Lodgement of notices with the ASIC.
Ensuring the company has a registered office.
Notifying the ASIC of changes.
Lodgement of financial reports.
Verifying minutes of meetings.
The secretary is appointed by the directors. Proprietary companies are not required to employ a company secretary.

14. Company Secretaries
An individual is allowed to assume that a company secretary has been appointed properly and can wield authority delegated by a director. This is the principle of ‘apparent authority’. This means that if a company secretary lacks authority and yet makes a contract with a third party, then that contract will retain force of law.