Director’s tip for non-executive directors

Be careful of discussing company matters informally with fellow directors, managers or staff. Rather do it only at official directors’ meetings.

It is exceptionally important for directors to ensure that the following items are properly minuted during their meetings:

- all documentation and information that is laid on the table
- any advice that is received and considered
- on what grounds decisions are taken in the best interests of all stakeholders

If a director does not agree with a decision, he must ensure that his opinion is minuted, and that it is noted that he voted against the decision.

Technical insanities are tough realities

Don’t laugh them off.

The infamous section 424 of the Companies Act implies the following ridiculous, but dangerous contradictions:

Paradox 1

If you are the trustee of a trust that owns shares in a company, and if you stay abreast of the company’s activities, you can be held responsible by creditors if the company is one day liquidated due to a recession.

On the other hand, if you are the trustee of a trust that owns shares in a company and you do NOT stay abreast of the company’s activities, you can be held responsible by the beneficiaries of the trust if the company is one day liquidated .........................

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