Company directors need to comply with several strict duties in relation to the companies they direct. To help directors perform these duties, they are given a number of powers and rights that enable them to competently (and ideally, profitably) direct their company. Three of the key powers/rights are discussed below.
The first power that directors have is to conduct administration of the company in accordance with the law and company constitution. This means that directors are given the power to do anything the law or company constitution says they can do. This power is the most variable of the ones discussed here. Because company constitutions can differ quite a bit, the extent of this power can change significantly based on which company you are a director of. Things like company purpose, trade area, size and structure can all influence the powers directors are given. Because of this variability, it is really important for directors to ensure that they know the extent of their powers in each specific company they direct.
Directors are also given the right to inspect company financial records and other corporate information. This is largely to assist them in making decisions about the future direction of the company. Having access to information regarding the company is key to the decision-making process that directors need to undertake, and it would be unreasonable to expect that they could make any competent decisions without access to corporate information.
Finally, directors also have the right to assistance and advice. Directors will not always feel completely competent to make decisions regarding the company and so they are given the power to receive advice from other parties. As for paying for this advice, the law is unsettled. In Australia, there is currently no general right for directors to use company funds to pay for advice, but it does seem like the law is developing towards providing this right to directors.
The powers of directors extend past the ones mentioned here and so it is important to keep researching the rights you might have as a director to ensure that you are helping your company be as effective and profitable as possible.
If you have further questions, please contact us at firstname.lastname@example.org.
This is not legal advice.