Duties and Responsibilities of a Director
(Section 213 of the Companies Act 2016)
- A director must at all times exercise his powers in accordance with the Act, for a proper purpose, and in good faith in the best interest of the company.
- A director must exercise reasonable care, skill, and diligence, having regard to:
a) The knowledge, skill, and experience which may reasonably be expected of a director carrying out the same functions; and
b) Any additional knowledge, skill, and experience which the director in fact possesses.
Consequences of Non-Compliance:
Under Section 213(3), any director who contravenes this provision commits an offence and, upon conviction, may be liable to:
- Imprisonment for a term not exceeding five years, or
- A fine not exceeding RM3,000,000, or both.
Important Point:
The law imposes a high standard of responsibility on directors to act in good faith and with due diligence to safeguard the interests of the company.