LAWS3100 Study Guide - Final Guide: Board Of Directors, Proprietary Company, Public Company
Company directors and other officers
Definition of officer and director
Role of officers
Directors
Board composition in listed companies
Appointment, resignation, removal and disqualification of directors
How directors make decisions – proceedings of the board
Section 9 of the Corp Act 2001 (Cth) defines ‘officer’ and ‘director’.
Officier includes:
A) a director or secretary of the company, or
B) A person:
•Who makes, or participates in making, decisions that affect the whole, or a substantial part, of the
business of the company
•Who has the capacity to affect significantly the company’s financial standing, or
•In accordance with whose instructions or wishes the directors of the company are accustomed to act
(excluding advice given by the person in the proper performance of functions attaching to the person’s
professional capacity or their business relationship with the directors or the company)
It also includes
-a receiver, or receiver and manager, of the property of the company
-An administrator of the company, or
-A liquidator of the company
Important to understand the definition of ‘officer’ because the statutory duties, including the duty to act with
reasonable care and diligence and the duty to act in the best interests of the company, are imposed on
officers. (more in Chap 11-14)
Director:
A) A person who is appointed to the position of director regardless of the name that is given to their position
B) A person who is not validly appointed a director but acts in the position of director, or
C) A person who is not validly appointed a director but the directors of the company are accustomed to act
in accordance with the person’s instructions and wishes (excluding advice given by the person in the
proper performance of functions attaching to the person’s professional capacity or their business
relationship with the director or the company)
A person who comes within A or B is referred to as a de factor director.
A person who comes within C is referred to as a shadow director.
Are directors required?
s201A(1) of the Corp Act: All companies must have at least one director. Every proprietary company must
have at least one director, with at least one director ordinarily residing in Australia
s201A(2): Every public company must have at least 3 directors, with at least 2 directors ordinarily residing in
Australia.
Role of directors?
To manage, or supervise the management of, the business of the company.
For companies that rely on the RR as their internal governance rules, s198A of the Corp Act provides that
‘the business of a company is to be managed by or under the director of the directors.”
Function depends on the size and type of the company. In a small company, the director or board of directors
may actually ‘manage’ the company’s business in the sense that they work in the business and make the day-
to-day decisions involved in running it.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
How directors make decisions proceedings of the board. Section 9 of the corp act 2001 (cth) de nes of cer" and director". A receiver, or receiver and manager, of the property of the company. A person who comes within a or b is referred to as a de factor director. A person who comes within c is referred to as a shadow director. Are directors required? s201a(1) of the corp act: all companies must have at least one director. Every proprietary company must have at least one director, with at least one director ordinarily residing in australia s201a(2): every public company must have at least 3 directors, with at least 2 directors ordinarily residing in. To manage, or supervise the management of, the business of the company. For companies that rely on the rr as their internal governance rules, s198a of the corp act provides that.
