The Company Director: Powers, Duties and Liabilities

Introduction 

The duties of a director can either be to the company or to the shareholders. Directors should always promote the long term success of the company failure to which they will be acting in breach of their responsibilities (Van Duzer, 2009) . The duties of a director include exercising reasonable care and diligence, acting in good faith and in the best interest of the company so as to promote its long term success and the duty not to delegate his powers to any third parties. 

In this case, Rogers exercised the duty to promote the long term success of the company because he had studied the market and he had established that the sports utility vehicle would do well in the market. He cannot be held responsible for the failure of the vehicle in the market because after he proposed the idea, the board of directors also conducted a research and they found it fit for the company to manufacture the vehicle. Rogers therefore, had already exercised his duty of promoting the long term success of the company by suggesting that the company should embark on the manufacturing of the vehicle and he had also anticipated profits. The failure was not on his side but on the oil producers and this was beyond his control since he had acted in good faith and for the long term benefit of the company. 

The duty to exercise reasonable care and diligence had been exercised by Rogers he did not act negligently because the losses incurred by the company were not as a result of him not doing his duties as a director but they were caused by something that was beyond his control-oil prices in the market. Furthermore, his actions were not directly related to the loss as he had conducted a survey of the target market the company intended to reach. The vehicles were also not defective and therefore they were expected to perform well when in the market. The failure of the product therefore, cannot be attributed to any form of negligence by the director since the role of the company to manufacture vehicles and it is up to the customer to fuel their own vehicle. 

Rogers, as a director, had not transferred his duties to any third party and this makes him not liable for failure of the product. Consulting the board of directors was not an action that would cause a breach in his duties. Rogers had acted in his capacity as a director by doing the necessary research and upon concluding the research; he tabled his suggestions to the board of directors who verified his project after much consultation. Rogers had therefore involved the company’s board of directors in his decision making and he had done all the relevant research towards this project. Therefore, he had not delegated his duties as his decision was informed on his own research and he had not misled the board in any way as the majority found his project to be good for the company. 

On account of the above points, it would suffice to conclude that Rogers had conducted all his duties as a director by exercising good faith and acting in the long term interests of the company. He also exercised professionalism by not acting negligently or by delegating his duties to a third party. Therefore, he is seen to have a strong defense in the lawsuit as he had done all the duties of a director towards a company. 

References 

. Taylor, C. (2012). The Company Director: Powers, Duties and Liabilities20121Peter Loose, Michael Griffiths and David Impey. The Company Director: Powers, Duties and Liabilities. Jordans, 2011. £79.00, ISBN: 9781846611599 11th ed. International Journal of Law and Management, 54(3), pp.242-243. 

Cr.gov.hk. (2018). Cite a Website - Cite This For Me. [online] Available at: https://www.cr.gov.hk/en/publications/docs/director_guide-e.pdf [Accessed 13 Feb. 2018]. 

Van Duzer, P. (2009). Companies Act 2006. Bristol [England]: Jordans