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.
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.
Company directors must exercise reasonable skill, care and diligence. This means the standards of a reasonably diligent person with (i) the general knowledge, skills, and experience that should be possessed by a person who performs a director's functions with respect to the company; (ii) the general knowledge, skills and experience that the director has.
Responsible company directors must not allow personal interests to conflict with corporate interests.
A director has certain responsibilities if he has a material interest in any transaction in which the company is or maybe a party (e.g. disclosure and abstain from voting). Until he fulfills these duties, he must not authorise, facilitate or allow the company to conduct transactions in the performance of his duties as a director. In addition, no transaction with the company is allowed unless it is in compliance with the law. The law requires directors to disclose the nature of their interests in relevant transactions. In some cases, the Bylaws may provide for procedures for directors or members to approve the proposed transaction. Directors must disclose relevant interests as required. If applicable, he must obtain the necessary approvals from other directors or members.
Company directors must not use their directorships (directly or indirectly) to seek benefits for themselves or others or to harm the interests of the company. The director must not profit personally from his position at the expense of the company (including through the use of confidential information).
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