The Indian Companies Act of 2013 classifies the duties of the directors into a fiduciary category and interest investment category. The first classification is all about ensuring that the directors of the companies maintain ethical practices and work towards the best interest of all their stakeholders. The second classification on the other hand, is to encourage the investment efforts that are made by the directors at several levels for providing elegant and swift resolutions as well as for making wise decisions to protect the company of unnecessary risks.
The specific duties that have been assigned for the directors include exercising of the responsibilities with utmost care and diligence. Also, the directors are not supposed to involve in a situation that may hamper the best interests of the company directly or indirectly. The duties of the directors also require them to:
A failure in the up keeping of the duties by a director can draw penalty charges up to five lakh
rupees and even more serious legal consequences depending on the gravity of the situation.
The specific duties that have been assigned for the directors include exercising of the responsibilities with utmost care and diligence. Also, the directors are not supposed to involve in a situation that may hamper the best interests of the company directly or indirectly. The duties of the directors also require them to:
- Act in accordance with the company's AOA
- Avoid any attempts to derive undue advantage from the company's profits
- Not assign his or her office to anyone else
- Abide by all the company policies and pre decided codes of conduct
A failure in the up keeping of the duties by a director can draw penalty charges up to five lakh
rupees and even more serious legal consequences depending on the gravity of the situation.
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