Directors are agents of the corporate in transactions they enter into on behalf of the corporate, although they’re not agents for individual shareholders or members. A director could also be a worker, a servant or maybe a “worker” of the corporate. He occupies the position of a trustee, although he’s not a trustee within the strict sense in respect of the Company’s properties and funds. Director’s liability http://Duties, role liabilities and responsibilities of directors in India by Narasappa , Doraswamy and Raja (2020). Retrieved 21 March 2020, from https://www.academia.edu/5625268/Roles_liabilities_and_responsibilities_of_Directors_in_India. arises thanks to their position as agents or officers of the corporate as conjointly for being within the position of trustees or having legal relation with the corporate or its shareholders.Some of these liabilities are in contract, some are in civil wrong, some are underneath the legal code et al are statutory, i.e., underneath the businesses Act, 1956 and alternative laws. The courts have, choose the liability of administrators, taken into thought a director’s position as a full.It is challenging to explain the liabilities of a director. The Director can’t delegate their authority that is specifically obligatory on them, and that involve the exercise of their own judgment and discretion. However, General wrongful conduct principles build the administrators in-person liable if they need either by choice or negligently caused damage to 3rd parties. Here it’s to be additionally noted that the administrators, That act in honesty and among the scope of their authority, won’t be command responsible for the tortuous acts of the association. it’s only administrators act in dangerous religion or outside the scope of their authority, can they need a drag. as an example, a worker is also dismissed while not simply cause, however the dismissal is also within the best interests of the association.
Accountability is an essential aspect of productivity fo r the Management. There should be some method for measuring directors performance. The magnitude of a director’s responsibility will depend upon the essence of his management. Four different guidelines have arisen since extending the general egalitarian standards to the business management.
They are
(1) because management must behave in good conscience in what they consider to be in the company’s best interest
(2) they must not use the powers bestowed on them for reasons other than those on which they are bestowed.
(3) Not to fetter their freedom as to how they will behave and
(4) that, without the company’s written permission, they shall not put themselves in a situation where their personal preferences or responsibilities to certain individuals are liable to interfere with the company’s duties .
After considering all the above-mentioned points, I would only like to conclude yes, while Directors have several responsibilities, but if they exercise them by observing the above-mentioned rules and with proper care as required from them, they should not be kept liable and neither will they be held liable for the act they have not performed and merely based on their status.
Referernce:
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