Here’s What You Need to Know
When we talk about compliance in our businesses we might automatically think about things like financial compliance, regulatory compliance in relation to health and safety, GDPR compliance, employee/ employer compliance and more recently pending compliance around carbon reporting and supply chains.
But as directors of these businesses, we have substantial obligations and compliance that we need to adhere to in order to comply with The Companies Act 2014. The act introduced for the first time ‘Fiduciary Duties of Directors of an Irish Company.
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties.
It’s worth a quick reminder on what the main fiduciary duties of a director are:
1. Act in good faith in the interests of the company.
2. Avoid or bring to the attention of the other directors any conflict of interest.
3. To act honestly and responsibly in relation to the conduct of the affairs of the company.
4. Not to use the company’s property, information or opportunities for his or her own benefit, or that of anyone else.
5. To act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law.
6. To have regard to the interests of the company’s employees in general and its members.
The company, as its own legal entity, has recourse to the director, to claim back any profit the director may have benefited from as a result of a conflict of interest or benefit from property of the company etc.
Other key information to note in relation to the role of a director of an Irish company:
1. Directors are responsible for the management of the company and are required to acknowledge that they have duties and obligations under the Company Act 2014.
2. Every person in the position of director is considered a director whether formally appointed or not. Shadow directors and De Facto directors have the same responsibilities as formally appointed directors.
3. For the avoidance of doubt there is no distinction between an executive and non-executive director.
4. Only a human person over the age of 18 is permitted to become a director provided there is no other mitigating factor.
5. There are many other statutory duties and obligations that a director needs to obey other than the listed fiduciary duties listed above.
6. Directors are required to provide an Annual Compliance Statement and to review their compliance procedures at least once a year.
If you would like further information please contact Bridget at email@example.com