INCUBATION

DUTIES OF DIRECTORS

The duties of director vary according to the nature and size of the company. But in all cases in discharging the duties of his position, he must act honestly and without negligence, that is, with that amount of care which an ordinary person will be expected to take, as if the business cut the company was his own.

1. A director need not exhibit in the performance of his duties a greater degree of skill that reasonably be expected from a person of his knowledge and experience.

2. A director is not bound to give continuous attention of the affairs of his company, his duties being of an intermittent nature to be performed at periodical Board Meetings or committee meetings. He is not bound to attend all Board and committee meetings, though he ought to attend all such meetings as he is reasonably able to.

3. In respect of all such duties as may be properly left to some other official having regard to the exigencies of business or the articles of association of the company, a Director is, in the absence of grounds for suspicion, justified in trusting that official to perform such duties honestly.

4. Though all books of account and other books and papers of the company are open to inspection by him, he is not bound to examine individual entries in the books.

5. While a director is undoubtedly liable for loss caused to the company through gross and culpable negligence on his part, he is not expected to take all possible care, his duty to the company extending only to the taking of such care as an ordinary man is expected to take in his own affairs.

6. Directors should ensure that the company’s fund are properly invested and not indulge in dangerous speculation.

7. In discharging their duties, directors must act honestly and must exercise such degree of skill and diligence as would amount to reasonable care which an ordinary man might be expected to take.