Oh to be a director

[awa355]

How often would the board of directors meet in a year?

Has anyone known of a director to stand up after a company collapse and say " Have my head, I'm responsible".

http://www.nzherald.co.nz/business/n...ectid=10875343

[mashman]

Meh! Captains of industry need to be paid well to be able to function properly, otherwise they might underperform if they feel that they aren't being valued what they believe they should be... hang on, that sounds like a vaguely familiar argument.

[davereid]

Most Directors run small, family owned and operated businesses. The family home is often the main equity, and the directors in full or part usually work in and manage the business.

Failure takes their jobs, and homes as well as the jobs of their workers, and these directors work diligently to ensure that doesn't happen.

But NZ has spawned a new breed of director and manager. Often government appointed, or networked into the job, these guys are usually at the helms of companies that exist as the result of government action.

They are merely there as well paid titular heads, with a paypacket they could never achieve from their own endeavors.

[pete376403]

WRT the 52K payrise that the chairperson of Mighty River just got, Tony Ryall says they have to be paid big or they'll quit.
So is there any record of any directors quitting because they weren't paid enough?

[Winston001]

Here are the responsibilities of a company director:

1. Management
The Board of Directors has primary responsibility for the financial performance and statutory compliance of the company. Where Directors have a role in the management of a company, the scope of their role should be explicit.


2. Major Transactions
These should not be entered into without a special resolution or be conditional upon such a resolution. A “major transaction” is one involving the purchase or disposition (or giving rights over) assets which are more than half the value of the company’s assets.


3. Good Faith/Best Interests
A Director when exercising powers or performing duties on behalf of a company, must act in good faith and in what they believe is the best interests of the company. The duty preserves the right of the Directors to make a business judgement. What is in the best interests of the company will often, but not necessarily, be what is in the best interests of the existing shareholders.


4. Proper Purpose
A Director must exercise a power for a proper purpose. It may be relevant where the Board is locked in a struggle with shareholders or endeavouring to forestall a take over. Where a Board engineers a share issue to produce more sympathetic shareholder support this may be a situation where Directors motives are questioned.


5. Compliance with the Companies Act and Constitution
A Director must not act or agree to the company acting in a manner that contravenes this Act or the company’s constitution. This provision does not create a separate offence but may be useful to shareholders obtaining relief against the Directors proposing to undertake (or refrain) from certain action.


6. Reckless and Insolvent Trading
A Director must not agree to the business being carried on in a way likely to cause substantial risk of serious loss to creditors or to cause or allow the business to be carried on in a way likely to create substantial risk of serious loss to company’s creditors. The Director must not agree to the company incurring an obligation unless he or she believes, on reasonable grounds, the company can meet that obligation when required.

Directors should ensure that up to date financial records are kept and that they read and understand those records and reports. Although a business must be allowed to take risks and the fact of temporary insolvency may occur, what is significant is the decisions made, the action taken (or the inactivity of the directors) in light of that information.


7. The Duty of Care, Diligence and Skill
A Director when exercising powers and performing duties must exercise care, diligence and skill that a reasonable director will exercise.

There is a limit to which a Director can avoid such a duty in the event of delegation and/or in the event of reliance on reports and financial statements and advice.

“……more is required of Directors than supine indifference the legislature requires diligence and action”
“……Directors should bring an informed and independent judgment to bear on the various matters that come to the Board for decision.”
A Director should understand the business, understand the financial statements and exercise informed independent judgment in every case.


8. Directors Interested in Transactions
A Director will be “interested” if in any company transaction:

• He or she is a party or
• Will or may derive material financial benefit
• Has a financial interest in a party to the transaction
• Is a Director/Trustee of another party that will obtain a material benefit (exceptions are made for wholly owned subsidiary and/or holding company)
• Has a close relative who will/may get a material benefit
• Is otherwise directly interested

In such a case the Director should declare his or her interest and record it in a register. A Director can still vote on the transaction and participate once their interest is noted. The boundaries as to what will be considered material are not precise and a prudent Director will generally disclose all transactions even where the interest is tenuous and the amount minor.




All very well but in reality I think many directors fail to understand their obligations. They also get lied to sometimes (or misled) by over optimistic managers.

Its a dangerous job even if you are diligent. Just ask Doug Graham and Bill Jeffries both of whom are honourable men but nevertheless have been convicted of making false statements because they were among the directors of Lombard Finance.

[Akzle]

HDoug Graham and Bill Jeffries both of whom are honourable men but nevertheless have been convicted

so your stance is either: the "Justice" system doesn't work and got it wrong, or that these pricks are actually not guilty.

[mashman]

The 8 Responsibilities of yore (and no mention of golf)

You'd expect the same thing of any employee in any company shirley?

[awa355]

Here are the responsibilities of a company director:




All very well but in reality I think many directors fail to understand their obligations. They also get lied to sometimes (or misled) by over optimistic managers.

Its a dangerous job even if you are diligent. Just ask Doug Graham and Bill Jeffries both of whom are honourable men but nevertheless have been convicted of making false statements because they were among the directors of Lombard Finance.

Thank you for the time to post your reply. Unfortunately, there haven't been too many directors in recent times to have shown much ,if any moral responsibility over the last few years. But then that would apply to most polititians as well, or most elected officials.

I did read of one director that was supposed to attend twelve monthly meetings a year, he missed three of them and still picked up his $180,000 in annual fees.

[Akzle]

I did read of one director that was supposed to attend twelve monthly meetings a year, he missed three of them and still picked up his $180,000 in annual fees.

to be fair, doing anything 12 times in a year is a big ask...

[mashman]

Thank you for the time to post your reply. Unfortunately, there haven't been too many directors in recent times to have shown much ,if any moral responsibility over the last few years. But then that would apply to most polititians as well, or most elected officials.

I did read of one director that was supposed to attend twelve monthly meetings a year, he missed three of them and still picked up his $180,000 in annual fees.

You first. Company second. Shareholder third. Customer fourth. Employee fifth. The Law/Compliance/Responsibility dead last. The way it has always been?

[Ocean1]

You'd expect the same thing of any employee in any company shirley?

Dunno why you'd expect it, you never see anything like that level of responsibility from any employee.

[mashman]

Dunno why you'd expect it, you never see anything like that level of responsibility from any employee.

OMFG... trickle-down does work.