Here’s a reminder:
• Comply with the rules of the company as set out in the articles of association and exercise your powers for those purposes;
• Exercise independent (rational and impartial) judgement;
• Further the success of the company for the benefit of the members (not yourself)
• Avoid a conflict between your personal interest and that of the company;
• Tell the shareholders about any interest or potential interest (direct or indirect) in proposed transactions;
• Not to accept benefits from third parties if the benefit is linked to you fulfilling (or not fulfilling) your duties as a director;
• To exercise reasonable skill, care and judgement in relation to the company’s affairs.
Now that you know what your duties are, you should also be aware of the consequences of a breach of any of these duties.
If you break these rules, the company or its shareholders (with the court’s permission and in the name of the company) can take legal action against you personally.
If you’re threatened with legal action, you’ll need to be able to argue (and evidence) that you’ve in fact acted reasonably and honestly, to avoid penalties which may include a court order to pay money (called ‘damages’) in compensation to those suffering harm caused by your actions. An example of acting reasonably and honestly would be if you can demonstrate that you acted on advice from your accountant or a lawyer, believing that advice to be sound, and even if that advice proved to be wrong.