General duties of directors

Thursday, 14 May 2020

Boards of directors are responsible for the overall governance and strategic direction of an organisation. They provide “overall superintendence” 1 of a company, overseeing both performance and compliance in accordance with the organisation’s purpose and objectives. 


The relationship between a director and a company is fiduciary in nature, meaning that a director undertakes to act in the interests of the company and not in his or her own interests.

The overriding duty of a fiduciary is the obligation of undivided loyalty. This obliges the director to act honestly, in good faith and to the best of his or her ability in the company’s interests. A director must not allow conflicting interests or personal advantages to override the company’s interests. Nor should a director participate in deliberations of the board if the director has personal interests or duties that may conflict with those of the company. The company to which the director has been appointed must always come first.

While boards are often said to make collegiate decisions for which they take collegiate responsibility, the law imposes individual duties on directors. This director tool provides an overview of core legal duties that apply to directors under the Corporations Act 2001 (Cth) (Corporations Act) and common law, and touches on other statutory duties, but is not exhaustive.

Downlaod the tool to read more. 

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