lecture 5- duties of directors

Question 1

What is the ‘Pro-shareholders approach’?

Answer 1

The Pro-shareholders approach, also known as the shareholder primacy model, posits** that a company’s ultimate goal should be the maximization of wealth for its
shareholders.**

Question 2

What is the pro-stakeholders approach?

Answer 2

The Pro-stakeholders approach identifies “stakeholders” as groups and individuals who influence, or
are impacted by, the creditors,
suppliers, and the organization’s mission. This includes local community, among others.

Question 3

What is the enlightened shareholder value approach?

Answer 3

Enlightened Sharevalue approach: This perspective suggests that both the company and its shareholders are catalysts for fostering a beneficial society.
* resembles pro-stakeholders approach but has one additional element: Shareholders+ Company should drive society’s betterment.

Question 4

What 2 kinds of duties do directors have?

Answer 4

1. fiduciary duties- to act within best interest of the company.
2. statory duties- duties by companys legislation/ legislation in general.

Question 5

When Civil liability for directors?

Answer 5

-directors are liable to people that appointed them;
-misused/applied company’s property
- Caused the company loss or expenditure as a result of misconduct.
Company may require them to pay money back.