ABSTRACT
In this chapter we will look at the role that directors and the other main administrative officer (the company secretary) play in the life of a company. We shall first note the different types of officers that a company may employ and who are to be considered to be directors. We shall see what laws govern their appointment and termination as well as any rules laid down by the law as to how the board should meet and decide matters. After summarising the procedural requirements that govern decision-making by directors, we will then consider the law relating to directors’ duties. Because there are several ways in which the interests of directors may diverge from those of shareholders, we will need to see how the law provides for the minimisation of these conflicts, and for remedying breaches of the general and more specific duties that are placed on directors. This is an area where the underlying law (both at common law and in equity) provided remedies to prevent directors from engaging in transactions which benefited themselves at the expense of the company.2 The courts also developed equitable and tortious rules to ensure that directors acted with proper care or diligence in relation to the business operations of the company. More recently, statute, particularly the Companies Act 1997, has laid down similar fiduciary duties and duties of care, diligence and skill. One of the important questions that arises from this is whether Parliament intended these new statutory duties to supersede the underlying law rules, or whether both sets of laws were to operate concurrently. As we shall see, this matter is still one of great uncertainty in PNG, and indeed in New Zealand, from where most of the provisions originated.
