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This note discusses the fiduciary duties owed by directors to the Company.
Directors must act in good faith in the best interest of the company as a whole. This means that directors have an obligation to act for the benefit of all current and future shareholders. In fulfilling this role, directors must (where practicable) consider the need to achieve a fair outcome among members.
Duty to use powers for a proper purpose for the benefits of members as a whole - This means that the director must not exercise his powers for a purpose different from that to which he / she was granted. The main and substantive purpose of exercising the powers of directors must be for the benefit of the company. If its main motivation is to be for other reasons (for example, to benefit one or more directors and gain control of the company), the exercise of power may be set aside. This obligation may be breached even if the director is acting in good faith.
When exercising power, directors must make independent judgment in accordance with the company's memorandum and articles of association (the “Articles of Association”) or any resolution, and should refrain from delegation powers except with proper authorisation from the company.