Corporations Law

Question: Discuss about theCorporations Law. Answer: Introduction: Section 198A The section deals with powers of directors and specifies that the affairs of the company should be managed under the directions of the director who can exercise all the powers that have been conferred on them by the Act. These duties that have been given to the directors are a series of statutory, common law and equitable obligations that are owned by them towards the company. The directors are supposed to act for the best interest of the company and bring benefits to the affairs of the company in the dissipation of their duties[1]. The obligation has been imposed to make sure that the essence of corporate governance is met by the directors and they do not act beyond their scope or do not exercise arbitrary power that is not in the best interest of the company. The duty of skill, care and diligence has been imposed to make sure that no unauthorized and inexperienced decisions are taken by the directors. This is because; there are several people who bestow their interests on the direc tors and if they end up acting without showing proper judgmental skills, these people might lose all their assets along with the company[2]. Hence, Section 198A ensures that the directors act under the powers that have been conferred on them and do not exceed their scope. Section 191 Section 1919 of the corporations Act contains a duty of the directors that they need to avoid all those situations where they can have a direct or indirect interest that might come into conflict with the interest of the company. This however does not state that conflicts arising out of companies transactions shall also be covered by it[3]. The essence is that the directors are duty bound to act according to their general duties so that the success of the company can ultimately be promoted. The board holds the responsibility of approving a matter that can conclude that the same is in the interest of the company so that a potential conflicting situation can be avoided and the relevant matter can be decided on such terms so that it brings out the best for the company[4]. This was decided by the senate after several rounds of discussion because there were several instances of insider trading and disclosure of confidential information in the past. However, after the incorporation of this section, the problem has been resolved to certain extent. Section 250R (2) and (3) This section is a part of the Australias Say-on-Pay shareholder voting approach. This regime is an advisory or nonshareholder vote on the remuneration report of the company. The report of the directors for the listed companies must conclusively include all the matters that are set out in 300A of the Act. This was amended by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 so that a procedure for voting could be provided in relation to the remuneration report in the AGM[5]. The requirement of notice males the directors more accountable in the dissipation of their duties and their obligations are further enhanced under the law in this way. This provides that the directors can no more plans to show some of their expenditures as a part of miscellaneous stuff. All these have to be accounted in the proper way and the responsibility in this matter has been further put on the Chief Financial Officer and the Secretary of the company[6]. Thu s, it can be said that this is an instrument in the hands of the shareholders to ensure that transparency remains in the affairs of the company and directors remain accountable for their actions. References Aier, Jagadison K., Long Chen And Mikhail Pevzner, "Debtholders Demand For Conservatism: Evidence From Changes In Directors Fiduciary Duties" (2014) 52Journal of Accounting Research Braun, D. et al, "When Elites Forget Their Duties: The Double-Edged Sword Of Star Directors On Boards" (2014) 2014Academy of Management Proceedings Keay, Andrew, "The Public Enforcement Of Directors' Duties: A Normative Inquiry" (2014) 43Common Law World Review Lim, Ernest, "Directors' Duties: Improper Purposes Or Implied Terms?" (2013) 34Leg Stud (Soc Leg Scholars) Mamutse, Blanca, "Directors Duties" (2014) 48The Law Teacher Moore, Colin R, "Obligations In The Shade: The Application Of Fiduciary Directors' Duties To Shadow Directors" (2016) 36Legal Studies