The role and responsibilities of Board of Directors
It is stated clearly in the Company Act 2016, Section 211 (1) that the business and affairs of the Company shall be managed by, or under the direction of the Board of Directors.
Essentially, the appointed board of directors are responsible to assess the overall direction and strategy of the business. They are also deemed as the agents of the Company and is bound by specific duties to ensure the Company achieve its goal.
All actions taken must be beneficial towards the Company
The appointed board of directors are normally a group of people with special skills, talents, and have an excellent background which is beneficial for the Company to attain its goal. Hence, it is only logical for them to exercise their powers in accordance with the Company Act 2016 for the best interest of the Company. When they exercise their duties, they must always consider the interest of the Company and no one else.
Avoid conflict of interest
It may not seem easy for smaller businesses where the director is also normally the shareholder (owner), but it is expected for every director to exercise their duties and avoid any conflict of interest as much as possible.
The law has treated a Company as a “legal person” which means that it can own assets and is liable towards its own liabilities without affecting the shareholders’ personal wealth. However, some directors nonchalantly abuse these regulations and treat the Company’s assets or private information as his own, which directly leads to conflict of interest.
Exercise its duties with care, skilfully and diligently
The director must always ensure that the decisions made are the highest standard and is always in the best interest for the Company.
Act within designated powers
A board of directors may consist of those people in charge for specific task such as the chief finance officer (CFO), who oversees the Company’s financial activities, while a chief technology officer (CTO) is in charge to ensure the Company is always up to date when it comes to technological advancements. These people are expected to adhere to the Company’s constitution and comply with the policy accordingly.
Promote the Company’s success
Finally, the board of directors are expected to actively exercise the dissemination of the Company’s values and success to garner longevity and Company scalability. They are the people where the shareholders will look for answers when it comes to the report of the Company’s performances.