Board / management structure

Delegation

Subject to Angolan law restrictions, and unless otherwise provided in the bylaws, the board of directors may delegate powers to one or more directors to deal with certain managing matters. However, the board retains overall responsibility for the company's operations and management.

The board of directors can also appoint attorneys to perform certain acts or categories of acts, without the need for an express contractual clause.

Last modified 1 Mar 2021

Unless the company's constitution provides otherwise, the directors can delegate their powers to any committee or person.  However, each director retains overall responsibility for the delegate's actions other than in the circumstances specified in the Act.

Last modified 8 Feb 2021

The directors may delegate tasks to employees, however, the directors remain responsible for the company's operations and management.

Last modified 8 Feb 2021

In the case of a collegiate management body structure (be it a one-tier or two-tier structure in a public limited liability company, or the instalment of a collegiate body in a private limited liability company), the board members can agree on a specific task division amongst them. Such division is however not effective vis-à-vis third parties, even if disclosed.

In addition, the directors can attribute the daily management powers, including the representation of the company in this respect, to one or more persons, that may act individually, jointly or as a collegiate body (as specified in the appointment decision). The daily management concerns all actions and decisions that do not go further than the day to day needs of the company, as well as the actions and decisions that, either due to their minor importance or due to their urgent nature, do not justify the intervention of the directors. Any limitations to the daily management representation powers of the persons(s) entrusted with the daily management are not effective vis-à-vis third parties (even if disclosed).

Last modified 8 Feb 2021

Subject to the constitution of the company, the board of a company may delegate to a committee of directors, a director or employee of the company, or any other person, any one or more of its powers.

However, the Companies Act stipulates instances in which the board cannot delegate its powers as follows:

  • The issuance of new shares and determing the consideration for them.
  • Distributions and dividends.
  • Any issue relating to shareholder’s discount.
  • The company’s purchase of its own shares and any issues relating to share redemptions.

Last modified 1 Mar 2021

Individual directors are not allowed to delegate their personal functions as directors. However, the board as a body may delegate part of its functions to senior executives, managers, lawyers, one director or directors’ committees and, for specifically determined purposes, to other persons.

Last modified 5 Apr 2021

Directors are not entitled to delegate the full scope of their management powers to third parties via a power of attorney and may only delegate a specific task among themselves or to third parties via a power of attorney. A general power of attorney is also prohibited even among the directors.

Last modified 8 Feb 2021

Directors may authorise an individual to act on its behalf by way of a power of attorney. However, this delegation only covers matters qualified to be day-to-day business and within the scope of the directors’ powers. Other matters which are deemed to be more extraordinary require a specific power of attorney.

Last modified 8 Feb 2021

The board can delegate some powers to committees and others (eg executives).  However, the board retains liability for proper selection, guidance and supervision of those to whom powers are delegated. Furthermore, the board retains liability for proper overall responsibility for the company's operations and management. Most essential duties of the board may not be delegated.

Last modified 8 Feb 2021

Subject to any contrary provision or specific restriction in the bylaws, legal representatives of an SAS may delegate certain powers to any person through a delegation of authority.

A delegation of authority consists of a transfer of authority implying the transfer from the grantor (délégant) of both the decision and under certain conditions, the corresponding liability. It is different from a power of attorney (mandat) whereby the principal (mandant) gives the power to do something for the principal in his name (for example a delegation to execute a specific agreement). No liability is transferred in such case.

As a principle, a delegation of authority is temporary. Where a delegation is granted for an indefinite term, the grantor may revoke it at any time.

Unless the delegation provides otherwise, the beneficiary may sub-delegate some of the powers he has received under the delegation.

Last modified 8 Feb 2021

The managing directors may delegate tasks to proxy holders, but retain overall responsibility for the company's operations and management.

Last modified 8 Feb 2021

Subject to the company’s articles of association or any shareholder resolutions, the board of directors can, (but is not legally required to) establish board committees to deal with specific matters of the company, delegate certain of its powers to the company's senior management and/or appoint a managing director or a CEO who will be responsible for the day-to-day management of the company's business.

The exercise of the power of delegation will not absolve a director from the duty to supervise and discharge the delegated functions – the directors remain responsible notwithstanding the delegation. They remain under a duty to properly supervise the exercise of powers by the delegates. A director will be liable to the company if he fails to exercise proper supervision over the activities of the delegates or has himself participated or sanctioned the act of default. Powers of delegation must be properly exercised and cannot be used in order to exclude one or more particular members of the board from the management of the company.

Last modified 8 Feb 2021

  • As a general rule, under Hungarian law, directors must perform their duties personally. This means that e.g. at Board meetings directors cannot be substituted by a proxy/agent, decisions of the Board must be based on the Board members’ votes cast directly.  Notwithstanding the foregoing, the company’s articles of association and/or its internal organisational rules (which are usually approved by the general meeting or the board) may allocate responsibilities for  implementing the decisions of the Board/directors to the various levels of the company’s organisations and to make decisions in their own right in this connection.
  • As regards the right to act on behalf of the company vis-à-vis third parties, the directors may grant authority to the employees of the company to act on behalf of the company in the scope specified in the power of attorney on a permanent basis. Such authority can also be granted via the internal organisational rules of the company (e.g. giving authority to the CFO in office at any time to sign certain documents in the name of the company). It is, however, not permitted to give authority to an employee covering the full scope of the directors’ duties. For ad hoc/specific cases, power of attorney may also be issued to third parties (non-employees) empowering such persons to act on behalf of the company vis-à-vis third parties.

Last modified 8 Feb 2021

If authorised by shareholders, or if permitted by the company's constitution, the board can delegate their powers to committees and others (e.g. executives).  However, the board retains overall responsibility for the company's operations and management.

Last modified 8 Feb 2021

In a SpA adopting the traditional system, the sole director or the board of directors can exercise all the management powers of the company. The board of directors can delegate specific functions and grant the relevant powers to a managing body (comitato esecutivo) or to a particular director (amministratore delegato). In this case the board retains supervisory and advisory functions while executive directors carry out the managing activity.

In particular, executive directors make sure that the organizational, administrative and accounting structure is adequate given the nature and size of the company and they refer to the board and auditors in relation to the general management performance and the most relevant operations .

The board of directors assess, on the basis of the information received by executives, the adequacy of the organizational, administrative and accounting structure of the company, they examine the strategical, industrial and financial plans of the company and they assess the general performance of management as reported by executives. However, the board of directors cannot delegate certain specific functions, such as: preparing the annual financial statements and the management report, the decision about an increase or a reduction in corporate capital; or the drafting of a merger plan.

Last modified 8 Feb 2021

KK with a board of directors

The board of directors may not delegate decisions regarding important business affairs, including without limitation, the following matters to individual directors:  

  • Disposal of and acceptance of transfer of important assets.
  • Borrowing of a significant amount.
  • Appointment and dismissal of an important employee including managers.
  • Establishment, changes or abolition of important structures including branch offices.
  • Important matters regarding the solicitation of persons who subscribe for bonds (e.g. amount of, interest rate for and the method and due date for the redemption of the bonds, etc.).
  • Development of systems necessary to ensure that the execution of the duties by the directors complies with the laws and regulations and the articles of incorporation, and other systems (called ‘‘internal control system’’ as described below).
  • Exemption from liability of directors to indemnify the company for its damages/losses arising from breach of their duties (details in exemption from liability of directors is described below).
  • Any other material business matters.

Except for these matters, the board of directors may delegate decisions and actions regarding business affairs to directors. Practically, companies establish an internal authorization rule to delegate execution/performance of certain business to directors.

KK without a board of directors

Where the company does not have a board of directors, it is permissible for directors to delegate decisions and actions to certain directors, except for following matters:

  • Appointment or dismissal of managers.
  • Establishment, relocation and abolition of branch offices.
  • Matters required to determine for holding the shareholders meeting under the Companies Act.
  • Development of an internal control system.
  • Exemption from liability of directors to indemnify the company for its damages/losses arising from breach of their duties.

Last modified 8 Feb 2021

Directors are empowered to delegate management responsibilities to employees and officers of the company.

The board may also delegate powers to committees of the Board. However, the board retains responsibility for the exercise of such delegated power.

Last modified 16 Jun 2021

The board of managers may delegate the daily management to any person appointed to that effect, or delegate special powers to any persons.

However, the board retains overall responsibility for the company's operations and management.

Last modified 8 Feb 2021

Unless otherwise provided for in the company’s articles of association, the daily management of the company may be entrusted to one or more general managers appointed by the board of directors, who report to that board and are appointed from the directors appointed by the company’s general assembly.

Note also that, regardless of the authorisation expressed in the articles of association, the company may, with the authorisation of the general assembly or the board of directors, appoint managers to run any branch of business that is part of its purpose, appoint assistants to represent it in certain acts or contracts or, by notarized instrument, appoint attorneys to perform certain acts or categories of acts. However, the board retains overall responsibility for the company's operations and management.

Last modified 19 Aug 2021

The board can grant a power of attorney to represent the company, for instance to a single director or another person who would generally not have the necessary representative powers based on the articles of association. Such a power of attorney is normally limited in scope (such as amount and/or nature of the acts) Such a (corporate) power of attorney is generally registered with the trade register of the Dutch Chamber of Commerce (Kamer van Koophandel) as proxy-holder (gevolmachtigde) in order to have external effect towards third parties.

Furthermore, a single director can grant a power of attorney to carry out a certain specific acts in its name. In practice, these kinds of powers of attorney are limited to a specific legal act for a specific period of time (for example, the signing of a share purchase agreement in respect of a particular transaction).

Last modified 8 Feb 2021

Generally, the board of directors may exercise its powers through committees consisting of directors or may delegate its powers to a managing director (or CEO) to manage the daily operations of the company. Such committee, or managing director must conform to the terms of such delegation.

Where directors delegate their powers they must not delegate their power in such a way and manner as may amount to an abdication of their duty and overall responsibility for the company's operations and management.

Last modified 1 Mar 2021

The board of directors can delegate certain duties to one or more directors in the board or to other persons. However, the board of directors must act with care and regularly check that delegation can be maintained.

Once a duty has been delegated, the board of directors still has a supervisory responsibility. The same rule applies to a managing director when delegating a duty.

Last modified 16 Jun 2021

The board of directors may appoint one director or more (acting as a committee) to resolve or perform certain acts. In order to permanently delegate any power of the board to some directors, two-thirds of board members must vote in favour and the resolution must be registered with the Public Registry of Companies.

Accountability for, and the submission of, financial statements to the shareholders' meeting may not be delegated.

Last modified 26 Jul 2021

Management board members can delegate their powers to company’s employees, civil law contractors or any other individuals. However, management board members retain overall responsibility for the company's operations and management. Furthermore, certain duties (e.g. signing yearly financial statements or reports on company’s activities) may be carried out only by management board members personally.

Last modified 8 Feb 2021

Subject to Portuguese law restrictions, and unless otherwise provided in the bylaws, the board of directors may delegate powers to one or more directors to deal with certain managing matters. However, the board retains overall responsibility for the company's operations and management.

The Board of Directors can also appoint attorneys to perform certain acts or categories of acts, without the need for an express contractual clause.

Last modified 8 Feb 2021

In the case of LLCs: Directors are allowed to delegate representation powers provided that such right was expressly granted to them by the GMS/AoA.

In the case of JSCs:

  • With a one-tier system - while delegation by the board of directors of company's management to managers is generally optional, for JSCs whose annual financial statements are subject to legal auditing obligations, the delegation of the directors' powers to managers is mandatory.

Company Law specifies certain duties that cannot be delegated to managers, e.g. summoning the GMS, drafting the annual report, approving the financial planning etc.

  • With a two-tier system - the management and representation powers belong exclusively to the executive board, which may perform all the operations required to carry out the company’s scope of activity (except for those belonging to the GMS and the supervisory board).

Last modified 8 Feb 2021

The powers of the Director may be delegated by the Director to another person by issuing a power of attorney.

The delegation of a vote of a BoD member is prohibited.

Last modified 8 Feb 2021

It is usually permitted under a Singapore company's constitution for the board to delegate their powers to committees and others (e.g. executives or a Chief Executive Officer (CEO)).  However, the board retains overall responsibility for the company's operations and management and such delegation does not absolve the directors from discharging their directors’ duties.

Last modified 8 Feb 2021

Unless restricted by the company's memorandum of incorporation, the board can delegate their powers to committees and others (e.g. executives).  However, the board retains overall responsibility for the company's operations and management.

Last modified 19 Apr 2021

Powers of attorney can be granted by the management body of the company in favour of other people. Nevertheless, some functions cannot be delegated. These functions are, among others:

  • The determination of the company's general policies and strategies.
  • Drawing up the annual accounts and its presentation to the general meeting.
  • The calling of the general shareholders meeting, the preparation of the agenda and the proposal of resolutions.

In addition, in the case of a board of directors, the board may also delegate some powers to an executive committee (comité delegado) or one or multiple managing directors (consejero delegado), unless prohibited by the company’s bylaws.

Last modified 8 Feb 2021

The board of directors can delegate certain duties to one or more directors in the board or to other persons. However, the board of directors must act with care and regularly check that delegation can be maintained.

Once a duty has been delegated, the person who has been entrusted with a duty is primarily responsible for the duty, while the board of directors who has delegated the duty has a supervisory responsibility. The same rule applies to a managing director when delegating a duty.

Last modified 8 Feb 2021

If authorised by shareholders, or if permitted by the company's articles of association, the board can delegate their powers to committees and others (eg executives).  However, the board retains overall responsibility for the company's operations and management.

Last modified 1 Mar 2021

Onshore UAE

The ability for a director to delegate their authorities is determined by what is permitted pursuant to the memorandum of association of the LLC or what is set out in a power of attorney authorising delegation.

Dubai International Financial Centre

If authorised by shareholders, or if permitted by the company's articles of association, the board can delegate their powers to committees and others (eg executives). However, the board retains overall responsibility for the company's operations and management.

Last modified 8 Feb 2021

If authorised by shareholders, or if permitted by the company's constitution, the board can delegate their powers to committees and others (eg executives).  However, the board retains overall responsibility for the company's operations and management.

Last modified 8 Feb 2021

Directors may delegate day-to-day responsibilities to management and must appoint, at a minimum, a president, secretary and treasurer, with duties outlined in the company’s bylaws or in a resolution of the board not inconsistent with the bylaws. Generally, the president acts as the company’s chief executive officer, the secretary records and maintains the proceedings and meetings of the company’s stockholders and directors, and the treasurer oversees the company’s finances. The board may also appoint one or more vice-presidents and other officers of the company, with the duties outlined in the company’s bylaws. Directors may not delegate their personal judgment or decision-making authority, such as their authority to choose the officers, but the board of directors may delegate certain decisions of the board to a special committee.  For example, the board may delegate the ability to set executive compensation to a compensation committee.

Last modified 8 Feb 2021

a director can appoint an interim director for the period of the director’s absence. In such case. the interim director and permanent director shall bear joint and several liability to the company. It is usually possible to delegate management responsibilities to other persons, provided that no restrictions on such delegation are established in the company’s charter.

A member of the collegiate management body cannot delegate their voting rights to other members of such body.

Last modified 8 Feb 2021

Generally, a board may not assign or delegate their responsibilities or accountabilities and should retain overall responsibility for the company’s operation and management. However, if permitted to do so by the memorandum of association, the board can delegate their powers to committees and others.

Last modified 19 Apr 2021

Angola

Angola

What type of company is typically used in group structures?

In Angola, the most common type of company used in group structures is the private company limited by shares.  This guide therefore focuses on the management of private limited companies.

Last modified 1 Mar 2021

Angola

Angola

What is a "director"?

There is no complete definition of the term "director" in Angolan law.  Basically, the law regards someone who manages the affairs of a company on behalf of its shareholders as a director.

What are the different types of director?

Directors validly appointed as such, through a shareholders' resolution, may be executive or non-executive.

The executive directors are responsible for the management of the affairs of the company.

The non-executive directors are responsible for the general supervision of the performance of executive directors’ duties.

Last modified 1 Mar 2021

Angola

Angola

Who can be a director?

A director must be at least 18 years old.  In the event of a legal person being appointed as a director, it must appoint an individual to exercise the office in their own name. The legal person must share liability with the person appointed by it.

Foreign directors must hold a work visa, ordinary visa or residency card.

Minimum / maximum number of directors

Under Angolan law there is no maximum number of directors. The company’s articles of association may, however, specify a greater minimum number and/or specify a maximum.

The management of private limited companies is carried out by a board of directors, composed of an odd number of members.

It may be agreed in the articles of association that the management shall be exercised by one single director when:

  • The number of shareholders is only two (which can only happen in cases where the State, public companies or entities legally equivalent to the State hold the majority of the share capital).
  • The share capital does not exceed an amount equivalent, in national currency, to USD50,000.00.

Last modified 1 Mar 2021

Angola

Angola

How are directors appointed?

Directors must be appointed by the company's shareholders (via a shareholders' general meeting or by unanimous written resolution).

A resolution appointing a director must be filed at the company’s registry office.

Directors must be appointed for the period fixed in company’s bylaws, which must not exceed four calendar years with re-appointment being permitted.

How are directors removed?

Any member of the board of directors may be dismissed (either with cause, or without cause) at any time by means of a resolution approved by the company's shareholders (via a shareholders' general meeting or by unanimous written resolution).

A director may also resign at any time through the issuance of a resignation letter addressed to the Chairman of the board of directors, or in case of the resignation of the Chairman, to the company’s audit board or audit committee.

The resignation or the resolution on director’s dismissal must be filed at the commercial registry.

Last modified 1 Mar 2021

Angola

Angola

Typical management structure

Typically, the management of private limited companies is carried out by a board of directors and supervision by a supervisory board, made up of an odd number of members, elected by shareholders at a general meeting.

One of the directors is appointed as Chairman of the board of directors.

How are decisions made by directors?

The manner in which directors can make decisions is set out in the company's bylaws.  In private companies limited by shares, the bylaws typically provide directors with flexibility to determine between themselves how decisions are made – whether by physical meeting, telematic means (provided that the company ensures the authenticity of declarations and the security of communications, registering the content of all interventions) or an unanimous written resolution.

Directors must meet at least once a month, unless otherwise provided in company’s bylaws.

The validity of the resolutions of the board of directors depends on the presence of the majority of its members.

In relation to the minimum quorum, the board of directors must not approve resolutions without the absolute majority of votes of the directors present.

Authority and powers

The board of directors has exclusive and full powers to represent the company.

The powers of representation of the board of directors are performed jointly by the directors.

Acts performed by the directors, on behalf of the company and in the use of the powers conferred upon them by law, shall bind the company before third parties, irrespective of any limitations that may be established by the articles of association or by decisions of shareholders, whether published or not.

Directors shall bind the company if, by affixing their signature, they indicate that intention.

Delegation

Subject to Angolan law restrictions, and unless otherwise provided in the bylaws, the board of directors may delegate powers to one or more directors to deal with certain managing matters. However, the board retains overall responsibility for the company's operations and management.

The board of directors can also appoint attorneys to perform certain acts or categories of acts, without the need for an express contractual clause.

Last modified 1 Mar 2021

Angola

Angola

What are the key general duties of directors?

The key duties of a director are set out in the Angola Companies Law, pursuant to which the director:

  • Must observe a duty of care towards the company, demonstrate capability, technical competence and an understanding of the company's business considered appropriate for the role, and execute its tasks with the diligence of a careful and earnest manager.
  • Must observe a duty of loyalty towards the interests of the company, serving the long term collective interests of the shareholders and taking into consideration the interests of other stakeholders such as employees, clients and creditors by ensuring the sustainability of the company. As a specific realization of this duty, the directors must not pursue or develop, directly or indirectly, other activities in direct competition with the company, unless duly authorized by the general meeting of shareholders.
  • Must carry out any acts deemed necessary or appropriate to achieve the corporate purpose in line with the resolutions adopted by the shareholders, the bylaws and the applicable law.
  • Are responsible for drafting merger and spin-off plans, in addition to other documents required or appropriate for the full legal and economic transparency of the transaction, as well as preparing a report in case of change of the company's legal form (i.e. a change to a different type of company).
  • Are responsible for performing and executing all managing acts not specifically reserved by law or bylaws to the general meeting of shareholders.
  • Are responsible for, following a shareholders resolution (except an unlawful resolution or resolutions that are not compliant with the company's by-laws), taking all necessary measures to execute such resolution, as promptly as possible (namely resolutions making any amendments to the company’s bylaws).

In addition, if agreed by the shareholders and set out in the company’s bylaws, the directors must also decide on and implement:

  • The acquisition, disposal and encumbrance of real estate of the company.
  • The disposal, encumbrance and lease of the business establishment of the company.
  • The subscription or acquisition of other companies' shares or the disposal and/or encumbrance of these shares.
  • The establishment of subsidiaries, agencies, branches or other local forms of representation of the company.

In general, the directors are bound to manage a company in a professional and diligent way, which includes compliance with all legal, statutory and contractual requirements.

What are directors' other key obligations?

The directors are responsible for preparing the annual reports and accounts and other financial statements required by law in respect of each financial year, and must submit them to the general meeting of shareholders and supervisory board, within three months from the end of each financial year, or within five months for companies that submit consolidated accounts or that use the equity method.

The directors are also responsible of preparing and submitting a proposal for the allocation of profits and/or handling of losses to the shareholders, in respect of each financial year.

Transactions with the company

Whenever there is a conflict of interest between the company and a director, the director shall advise the Chairman of the board of directors and abstain from voting on the resolution concerning that conflict.

The company may only grant loans or credit to directors, make payments on their account, guarantee obligations that they have contracted or make advances to them on account of the respective remuneration, up to the limit of the monthly amount thereof.

Contracts signed between the company and its directors, directly or through another person, shall be null and void except if they have been previously authorised by means of a decision of the board of directors, in which the director concerned may not participate, and if they have obtained the favourable opinion of the supervisory board.

Last modified 1 Mar 2021

Angola

Angola

Breach of general duties

Directors are severally liable towards the company for the damages caused to the company as a result of their actions or omissions that are not compliant with their legal statutory or contractual obligations, unless they prove that their actions/omissions were not caused with intentional or negligent misconduct.

The directors may also be subject to criminal liability.

A lawsuit against the directors may be brought by:

  • The company – in this case a shareholder’s resolution to bring the lawsuit must be approved by the majority of the shareholders, and the lawsuit must be sought within six months from the date of such resolution.
  • In the absence of a lawsuit sought by the company, one or more shareholders who jointly own, at least, 10% of the share capital  may bring a liability suit against the directors to claim reparation for damages caused to the company.

A company may seek a range of remedies against a director for breach of duty including damages, recovery of misapplied property, accounting for profit made in breach of duty, an injunction to prevent breach and rescission of a contract.

Liabilities on insolvency

If during the course of its management the company goes bankrupt, the directors may incur in liability if the bankruptcy is declared fraudulent or culpable. The crime of fraudulent or culpable bankruptcy is punishable with a penalty of two to eight years' imprisonment.

Other key risks

Personal liability for directors may, in certain circumstances, arise under Angolan legislation including that relating to environmental and health and safety, employment, consumer protection and bribery/anti-corruption.  In certain cases, criminal liability may arise.

A director may also be disqualified by the court from acting as a director or from taking part in the promotion, formation or management of a company.  A disqualification order can be made for a variety of reasons (e.g. conviction for criminal offences relating to the running of a company, persistent breaches of statutory obligations such as filing documents with the companies register, being found liable for fraudulent or wrongful trading and generally for conduct which makes a director unfit to manage a company).

Last modified 1 Mar 2021

Angola

Angola

How can directors be protected from liability?

The board of directors or the shareholders' general meeting may declare null and void or annul defective resolutions, at the request of any director, shareholder with the right to vote or of the supervisory board, made within one year of becoming aware of the defect that serves as its basis.

The general meeting of shareholders may ratify any resolution or substitute an invalid resolution if it does not concern a matter that falls within the exclusive competence of the board of directors.

Directors shall not execute or allow to be executed resolutions of the board of directors that are null and void.

Directors' and officers' (D&O) insurance is also available. It typically provides both cover for individual directors against claims made against them in their capacity as director, including defence costs (which applies when indemnification by the company is not available), and company reimbursement when it has indemnified its directors (subject to an excess/retention). Policy exclusions typically include claims in respect of a director's fraud, dishonesty, wilful default or criminal behaviour.

What practical steps can directors take to avoid liability?

Directors should:

  • Keep informed about the affairs of the company, particularly its financial position, and compliance obligations. Directors should have access to up to date financial information, prepare thoroughly for and regularly attend board meetings and familiarise themselves with key legislation affecting the business.
  • Make full disclosures to the board and shareholders if they have outside positions or interests which may give rise to a conflict of interest and/or if they have a personal interest in any proposed or existing transaction or arrangement with the company.
  • Keep records and take advice – directors should ensure that full written records of board proceedings are made reflecting the reasoning behind key decisions. This should include any alternative courses of action considered. Minutes should also record any disagreement amongst the board and the reasons for that. In addition, directors should ensure that returns and accounts and filed promptly and take professional advice for decisions based on areas outside their personal expertise, for example from legal professionals and accountants.
  • Be aware of, and comply with, any group-wide governance policies. These may cover areas such as health and safety, ethics, bribery/anti-corruption, and human rights. Compliance with them is designed to help directors (and employees) fulfil their duties and obligations and minimise the risk of liability.
  • Act, not only with diligence, but also with loyalty, keeping in mind that they must act always in the interest of the company, taking into account the long-term interests of the shareholders and considering the interests of other subjects relevant to the sustainability of the company, such as its workers, customers and creditors.
  • Also in a group situation, directors should keep in mind that thet must act in the best interest of their group company. Whilst group interests and that company's interests are usually aligned, this may not always be the case (e.g. when their group company's solvency is adversely impacted).  It is important to keep communication and reporting lines as open and clear as possible between parent and subsidiary companies when issues may arise and seek appropriate advice.

Last modified 1 Mar 2021