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  2. POSITION OF DIRECTORS  DIRECTORS ARE : - AGENTS [Great Eastern Rly Co v Turner] - OFFICERS [s.2(1)] - EMPLOYEES NOT SERVANTS - TRUSTEES [Re Forest of Dean Coal Co]
  3. FUNCTION & POWER OF DIRECTORS  SECTION 211 - Business and affairs of the company must be managed by or under the direction of the BOD - Power of managing - Power of directing - Power of supervising
  4. TO WHOM THE DUTIES ARE OWED  To the company  To whom?  The significant groups in the company  Shareholders and creditors  What about employees?
  6. Cont.
  7. 1) Why a director is required to act in good faith? - stands in a position of trust towards a company - Having a duty known as fiduciary - This type of duty found in the a special relationship of certain parties 2) Situation that does/does not amount to good faith: - Re W.M. Roith Ltd - Marchesi v Barnes & Keogh ACTING IN GOOD FAITH IN THE BEST INTEREST OF THE COMPANY AS A WHOLE
  8. Cont. 3) How to act in good faith in the best interest of the company? How did the court determine the act that amount to good faith? - Re Smith and Fawcett Ltd - Shuttleworth v Cox Bros & Co (Maidendhead (Ltd)
  9. USING POWER FOR A PROPER PURPOSE  The power entrusted to the director must be used properly for the purpose for which the company was formed  Used in accordance with what has been set out in the articles and memorandum  Cannot use the power for any collateral purposes  Case: Howard Smith v Ampol Petroleum Ltd - acted in good faith alone is not enough if the directors had exercised their powers for collateral purposes
  10. CONT  A director is in breach of duty when he acts outside the power despite the action is in good faith in the best interest of the company  Cases: - Mills v Mills - Kelapa Sawit (Telok Anson) Sdn Bhd v Dr Yeoh Kim Leng & Ors - Re Duomatic Ltd - Section 223 - Section 224 - Section 225 - Section 226 - Section 227 etc
  11. DO NOT BE IN A POSITION OF CONFLICTING OF INTEREST  Requirement of no conflict of interest is one of the most important parts of the duties of a director  A director is not permitted to be in a position where his duties to the company and his personal interest conflict with one another  S. 218
  12. DUTY OF DISCLOSURE  It is a paramount duty of a director to advance the interest of the company rather than his own interest  To perform the duty effectively, the directors are required to disclose whatever interest which might compete with the interest of the company  S.219  S.221